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When is 28% bracket not 28%?

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This is real from a 2014 tax question
I had a 401K that I cashed in back in November. I paid 20% taxes on it when I did that. I received my 1099-R and while doing my taxes I entered that in and am now being charged another 30% in taxes. I have double checked that I entered everything correct and so has my father. It just seems to be taxed a total of 50% all together is a lot of money. Any suggestions?
Our answer
First thing is…. When the 401K distribution occurred, the broker had no idea what your personal tax rate is.
They withheld 20%..
But you could be in a 28% bracket….. (or even higher up to 39.6% plus more on investment income).
Now, on top of that, if you are under age 59 ½ you are charged an additional 10% penalty…
So, in my example, the total tax is 38%, not 20%. Again, your broker handling the distribution would not know your individual tax circumstance.
Then, that additional income effects some itemized deductions, effects some child credit issues….. etc. so, while your tax rate may be 28%, you lose some itemized deductions (or lose some credits) effectively making the tax rate even higher… but Congress doesn’t want you to know that….
It is not the answer you want, but it is the answer!