IRA and Annuity

richiefortrucking
richiefortrucking Member Posts: 3 Newcomer
in Filing my taxes

I'm 61 years old in New York State. I had a k4 retirement account from a company when I left the company I rolled it over to an IRA which I just closed out because it wasn’t earning much interest, I also drew money out of an annuity. Let's say the 2 numbers and some other interest are 20K and I take a standard deduction, approximately how much I owe?

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  • AlexO
    AlexO FreeTaxUSA Agent Posts: 102
    Answer ✓

    Hello, richieffortrucking!

    That is a great question! I'm assuming you meant a 401(k) retirement account. Correct?

    If so, the rollover of a pre-tax 401(k) to a traditional IRA won't be taxable. However, if you withdraw the funds by closing the IRA, the withdrawal will be taxable. Because you're over the age of 59 1/2, the withdrawal is not considered early, and you won't be charged a penalty on the withdrawal.

    Are you a single filer? If so, your standard deduction would be $13,850. After the standard deduction of $13,850 is applied, $20,000 of total income would result in about $6,150 of taxable income. 10% of this, which would be the marginal tax rate at this taxable income level, is $615.

    If you have not already taken the withdrawal, you may want to consider having tax withheld to cover the $615 owed. If you have too much withheld, you can receive it back via a tax refund.

    You can find the 2023 standard deduction amounts at the IRS link below:

    https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023

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  • richiefortrucking
    richiefortrucking Member Posts: 3 Newcomer
    Answer ✓

    Wow, thanks for the answer, I thought it was going to be a lot more.

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  • richiefortrucking
    richiefortrucking Member Posts: 3 Newcomer

    Correction it's a 401K that I rolled over to an IRA (not roth)

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  • JHN1128
    JHN1128 Member Posts: 1 Newcomer

    I HAVE TAKEN OUT MONEY THIS YEAR IN MY ANNUITE. I TAKE FEDERAL AND STATE TAXES OUT EACH TIME. I WANT TO KNOW WILL THEY SEND ME SOME TAX FORM TO FILE ON MY TAXES FOR2024.

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  • PhillipB
    PhillipB FreeTaxUSA Team Posts: 69

    Hello JHN1128,

    Yes, the annuity company will send you a 1099-R sometime in late January or early February for you to use in filing your tax return.

    Thanks for using FreeTaxUSA Community

    PhillipB TaxPro Agent, FreeTaxUSA

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