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Alana
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Taxes/Retirement  Reply with quote  

I took some money out of my retirement, and I am not yet 59. Because I had no idea I should have reported this as income, I now owe the IRS over $8000.
Should I take some more out of my retirement to pay this fee? I've made a payment arrangement with them, but it will take forever to pay it.
Any ideas are welcome!
Post Thu Mar 30, 2017 12:30 am
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oldguy
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quote:
Should I take some more out of my retirement to pay this fee?


I'm surprised that your school's administrator didn't point that out to you and suggest a better plan for you. And at least warn you about the huge upcoming tax & penalty costs?

Borrow the $8000 elsewhere if possible. If you take it out of your retirement, you'll need to take roughly $12,000. The taxes & penalty on the $12,000 will roughly $4000 - and the remaining $8000 goes to the IRS to pay your first tax bill.
(The $12,000 will be part of your 2017 income so the $4000 tax won't be dues until April 2018.)
Post Thu Mar 30, 2017 2:27 am
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anirudh
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To save your child's future school education expenses while saving for your child's retirement, strengthening the goal of the goals that can be saved is a challenge for many parents. On the one hand, you want your children to get a solid education and want to get a successful career. On the other hand, you would also want to have financial resources to enjoy your own retirement years, even without financial burden on your child.

In order to increase your inequality in order to achieve two goals, financial planning experts have often suggested establishing college savings accounts dedicated to them. Some of the savings are confusing when some people choose to focus on their efforts to increase their retirement savings and press the accounts to cover college expenses.

For example, if you have your college savings and retirement savings in the same college, it is difficult to know how close you are to reach it, even if it is not impossible. If you have $ 250,000 in your retirement savings account, how much money will you get after paying for college? It is almost impossible. In addition, if you spend more in college, you may find yourself in severe retirement savings. For this reason, you can consider keeping your retirement savings and college savings in different accounts.
Some things are about things like thinking about retirement vehicles for college savings.
Different time horizons require a different investment policy
When your kids are toddlers, the college will be a long-term goal. Of course, 5-year-old is only 13 years old from his first year in college. This is a much less horizontal than your retirement, which may be 20 years or longer.

For this reason, it may be wise to maintain a small aggressive asset allocation for your college savings. And as the first year approaches, you move towards a more conservative allocation to help minimize the disadvantages of losing a portion of your savings in the stock market recession.

These portfolio management moves make it easier when you have a separate college savings account. In fact, 529 college savings plans Age-based portfolios, like your child's high school graduation date policies, automatically become less aggressive. However, if you manage your family's college savings, visit your first year's college and visit your property allocation and risk.
Increase tax benefits

There are many types of college savings accounts and each tax benefit that makes college more easier for you to reduce your tax burden.

With 529 college savings plans and Coverdale Education Savings Accounts (ESAs), any incomes will be postponed to the federal income tax. Tuition, fee, and withdrawal payable for higher education expenses like room and board are free from federal income taxes. Many states offer additional tax benefits to residents who invest in 529 scheme in their own state.
With a conservative account such as the Minor Account (UMMA) or the Uniform Transfer to Minor Account (UTMA), a minimum portion of investment revenue can be exempt from federal income tax and typically lower tax rates for some or more taxpayers.
It's easy to ask for family and friends help

Your family and friends' gifts provide a great boost to your child's college savings accounts. It's easy to deposit a gift from a family, friends, or a gift directly to the account, with a special college savings account.

That's not about retirement accounts. It is impossible to deposit cash funds for your own retirement accounts from others. For example, with a 401 (k) plan, the only way to contribute is by salvage payments.
Retirement account rules are complicated
If you are thinking of pressing your retirement savings when you have time to pay for college, the IRS will allow you to take non-penalty free delivery from IRAs to the eligibility for higher education. In fact, by doing so you reduce the funds to pay for your own future retirement expenses.

If you take a delivery from a conventional IRA or Roth IRA, you will have to pay up to the age of 59½ and you usually get a 10 percent withdrawal penalty. If the Roth collected your distribution distributed works from the IRA (rather than earnings), distribution is not usually subject to taxes. If you are already 59 years or older and your Roth IRA requires five years of age, your entire distribution tax is free. The Roth is tax-free for distribution from the IRA and the penalty is free, satisfied in a five-year period, the Asians met: 59 ½, age of disability, a first-time home purchase, or death. However, if you are withdrawing earnings from Roth IRA or any initial withdrawal from the traditional IRA, taxes are still part of the distribution, usually taxed as part of the initial withdrawal. In addition, colleges have financial assistance, Distribution of IACs from IRAs when calculating ya keys. In these calculations, income is higher than earnings because IRA distributions can actually reduce the amount of financing available to your child. Depending on your employer's office retirement plan, you can borrow against the value of assets in your 401 (k), 403 (b), or 457 plan. Debt revenue is not taxed as a regular income and a 10 percent initial withdrawal penalty. In addition, your credit income does not count revenue in financial supporting calculations. However, there are loans on many loans. If you change employers or lose your job, you will have to pay a loan immediately on interest. In the event that money is already spent on college expenses, you may not have financial means to pay off debt. If it happens and you are within 55 years of age, you will be treated as a taxable income through debt and a 10 percent initial withdrawal penalty. If you are over 55 years old, no penalty is applied, but the tax is paid as a normal income. An additional option to "withdraw the hardship" from your office retirement plan. The rules vary from owner to other, but in most cases, you can not qualify for the withdrawal of difficulties for higher education expenses until you ever have any available credit. Any amount of tax withdrawal you will be taxed as simple income, and a 10 per cent penalty applies if you are younger than 592. These taxes and penalties will take a serious cut from the amount you will be available to pay for college expenses. For example, a 28 per cent of the 50-year-old Federal Tag Bracket withdraws $ 20,000 in difficulties. $ 5,600 and $ 2,000 in federal taxes are fined. Reduces $ 12,400 distribution for $ 20,000 in distribution without any state or local taxes to be applied. As longevity increases due to retirement savings support, many Americans have to live their retirement savings for a period of 20 to 30 years or longer. And, you or your children can not afford college expenses financially and are not a retirement loan. Financial planning experts often need more importance than saving for retirement. College education is also important for your children, there are many other ways to spend your annual retirement contributions. Your retirement may be harmful to safety. These include home equity loans, student loans, work-study programs, grants and scholarships. To reduce college expenses, your child may also be able to attend local community college or reside in a nearby college. If you have enough liabilities to cover your child's expenses, invest in their future. Studies have shown that college graduates have more lives than those who do not have a college degree. Those revenues can be applied towards paying college loans. By the way, by establishing dedicated college savings accounts and having the desire to press your retirement savings, the inequality will be reduced if you have a financial burden on your children after your retirement.
Post Tue Sep 12, 2017 6:33 am
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shilpa111
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Taxes  Reply with quote  

hi guys
Taxes are important to every person.
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Post Mon Dec 11, 2017 9:08 am
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