SEP IRA

Archive for August, 2006

Question: How much in taxes and penalties if we were to cash in $50,000 we have in a SIMPLE IRA?

Answer: It depends on your other income as to what bracket you would end up in but here are some starting points:

25% Federal Income Tax (approximate guess at bracket)
10% Federal Penalty
??% State Income Tax (If Applicable – Varies by State)

If you can avoid it, don’t do it. It will cost too much in taxes.