How are federal taxes calculated on an individuals yearly earnings,e.g. by a percentage or formula chart ?
‘06 was a “really wonderful” year for me financially !! The I.R.S. is gonna’ love me, but I’m stocking up on vaseline before hand..Company I worked for “Consolidated”, putting me out of a job.. Bad enough, but, I had an outstanding loan on my 401-K account which became immediately due as soon as I was laid off.. Long story short.. Money from loan was long gone despite the fact I had taken the loan out for 4 years.. Impossible to repay loan within the 30 days from lay-off so loan becomes taxable income..Because of my age I “only” had to pay a 10% penalty, but the loan is considered taxable income.. Question: How big a “hit” tax wise am I looking at ?? We’re talking about a sum under $20,000.00 that I have to claim.. Also will have to pay state income tax on the same money……New York state no less !! Yes, ‘06 was a very good year !! NOT!!!
A better category would have been personal finance, as this DIY category mainly deals with do-it-yourself home-specific projects.
However, you have been sadly hit by the gremlin which befalls many during a transitional period.
Failure to repay to 401.
Fed & State taxes are caluclated as a percentage of income, however, the do make available tax-tables which ease the calculations.
The $20,000 bumps you into a higher marginal tax rate — that means you’ll be paying a higher percentage of tax on this 20k than you did on your regular salary.
Tax is owed, as it was never taken out before — shielded by the 401k.
Below is link to the IRS tax tables, and New York tax schedule.
good luck.
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