smithff33[at]aol.com (Herb=A0Smith) posted:
- quote -

Agreed! I'll personally plead guilty to quickly figuring
things in my head -- but I was really on my way to pointing
out the dearth of info and advice to seek help.

Mea culpa :-)

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"Herb Smith" <smithff33[at]aol.com> wrote:
- quote -

<snip
- quote -

Well, if you want to quibble about little things like math
errors in reaching taxable income, I suppose that's true,
although I haven't checked your (or anybody else's) math.

As the only bright response to the original question said,
"get a return and figure it out."

--
Phil Marti
Clarksburg, MD

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Thanks to all. This was great help.

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Herb Smith wrote:
- quote -

Interesting to note that in 5 other responses only 2 managed
to arrive at the correct bottom line. Good thing we all use
tax software to handle the mundane arithmetic :-)

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Missy wrote:
- quote -

GOOD JOB!


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- quote -

All good!

- quote -


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Rich Carreiro wrote:
- quote -

OK, so far

- quote -

Tax Table amount is $6,084

- quote -

Don't forget the Child Tax Credit. Net tax is $7,584

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Phil Marti wrote:
- quote -

Not exactly. Table amount is $6,084 minus Child Tax Credit
= $5,084

- quote -

Actually, the bottom line is $7,584


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Bill wrote:
- quote -

Actually, the result is $45,400

- quote -

Try $6,084 (from 2005 Tax Table)

- quote -

$5,084

- quote -

Bottom line = $7,584

- quote -

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Shocking!
Two out six people came up with the same number,
on the tax return based upon five submitted data points.

In the old days, before computer tax software, I'd feel
ready to submit a hand computed return (1040+A+B+D)
when I got successive computations to agree within
a $100 or less.

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"Jay" <jay6447[at]hotmail.com> wrote:

- quote -

You did not provide enough information for an answer. The
tax is based on your TAXABLE income which is the total from
all sources minus deductions for adjusted gross income and
minus exemptions and minus either the standard deduction or
the itemized deductions. To that you need to add
self-employment tax if applicable.

Then after you get the total tax, you subtract any
refundable and nonrefundable tax credits that may apply.

If you can't do all that, buy a tax program at Staples,
Office Max or Office Depot and calculate it on your
computer. If you don't want to do that, go to a CPA or H &
R Block

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- quote -

Teach a man to fish ... Here's how you would figure that. Get a form 1040.
Fill out as follows:

Line 7 Salary $40,000
Line 15b IRA 25,000
Line 37,38 AGI 65,000
Line 40 Std Deduct 10,000
Line 42 Pers Exemp 9,600
Line 43 Taxable 45,400
Line 44 Tax 6,084
Line 52 Child Credit 1,000
Line 57 Income Tax 5,084
Line 60 IRA Penalty 2,500
Line 63 Total Tax 7,584

Then recheck your numbers (I didn't)

--
Don EA in Upstate NY

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Jay wrote:

- quote -

Looks like $7584

Missy Doyle

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Jay wrote:

- quote -

Why wonder, just get the forms and fill out the return. This
is not a free tax preparation worksite. You will report a
$2,500 early withdrawal penalty, regardless of whether you
owe any income tax or not. BTW, did you have any withholding
from that salary?

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jay6447[at]hotmail.com (Jay) posted:

- quote -

$40K + $25K = $65K

MFJ, standard deduction is $10K, which brings income down to
$55K.

3 exemptions for self, wife and child = $9600, which gets
your taxable income down to $44.4.

That taxable income would mean $5934 taxes due on line 46.

But wait: You would qualify for a $1,000 Child Tax Credit,
bringing tax due on line 57 to $4934.

Oops! Bummer. You have to add the $2,500 additional tax on
your IRA early withdrawal, on line 60. So you'd owe $7,434.

Of course, you didn't report how much you had withheld.
Usually, the IRA custodian will withhold the 10% that is
known to be due as a penalty for an early W/D.

And your salary might have had enough w/h to virtually cover
the balance. It all depends on dependents you claimed on
your W-4. And of course, you didn't mention interest earned
from any savings accounts, etc.

So while I can kill time giving you the numbers above, no
way to really answer your question on the facts presented.

But the bare bones outline above will give you some idea.
Of course, your entire facts might change things. My
advice: seek help.

Bill

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"Jay" <jay6447[at]hotmail.com> wrote:

- quote -

Income tax: $5,534
Early distribution penalty: $2,500

Total $8,000 and change. Be sure to check Publication 590
to see if you can apply any of the early distribution
penalty exceptions.

--
Phil Marti
Clarksburg, MD

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"Jay" <jay6447[at]hotmail.com> writes:

- quote -

Assuming you still be taking the standard deduction and you
and your wife have no other income, we get:
Adjusted Gross Income: $65,000
Less: MFJ standard ded: ($10,000)
Less: three exemptions: ($ 9,600)
------------
Taxable income: $45,400

Tax:
Income Tax: $ 6,080
Penalty Tax: $ 2,500
-------------
Total tax: $ 8,580

Why exactly did you make the early withdrawal? Depending
on the circumstances of it, some of it may be exempt
from the *penalty* tax (but not the income tax).

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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Here are the details:

Income from salary: $40,000.00
Early Withdrawal from IRA: $25,000

Filing Status: Married Filing Jointly + one 6 year old child.

Approx. how much tax (+penalty) will I end up paying for 2005?

Thanks,
Jay

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