I am withdrawing my retirement funds of $8,000. I understand that John Hancock will withhold 20% for taxes and to account for the early withdrawal penalty. How much should I withhold for federal and state income tax if I live in Indiana?

ANSWER

The BIDaWIZ Team's Answer:

On the $8,500 you would owe 15% in federal taxes or $1,275 and 3.4% in state taxes or $289 for a total of $1,564 or 18.4%. Please note that this is an estimate based on the information you've provided. Please note that if you withdraw from a retirement account early, you can be subject to a 10% early withdrawal penalty in addition to the taxes mentioned above.