Lump Sum Pension Payout

[desertcelt]

Arizona.
Considering taking a former employer's pension cash out. Small pension of ~$26K. I understand the required withholding of 20% for federal taxes but I want to know what my tax liability will be when I file my 2019 taxes next year. What is the best way to figure this out?
Household AGI last year was about $162K. Also want to know my state tax liability.
Thanks in advance.

 

[ShyCat]

Since this is a legal advice board, I suggest you google "estimate 2019 taxes".

 

[LdiJ]

Arizona.
Considering taking a former employer's pension cash out. Small pension of ~$26K. I understand the required withholding of 20% for federal taxes but I want to know what my tax liability will be when I file my 2019 taxes next year. What is the best way to figure this out?
Household AGI last year was about $162K. Also want to know my state tax liability.
Thanks in advance.

You really need to see a local tax pro who can run the numbers for you. However, I can give you a brief idea. Your federal marginal tax rate is likely going to be between 22-24% depending on your filing status and overall tax attributes. The Arizona income tax rates are between 2.59-4.54%

Therefore you are likely to owe a little more, federally, than they would withhold, and unless you convince them to withhold state taxes, you will owe those as well.

 

[adjusterjack]

Arizona.
Considering taking a former employer's pension cash out. Small pension of ~$26K. I understand the required withholding of 20% for federal taxes but I want to know what my tax liability will be when I file my 2019 taxes next year. What is the best way to figure this out?
Household AGI last year was about $162K. Also want to know my state tax liability.
Thanks in advance.

Consider rolling that money into a regular IRA , avoid withholding, and defer the taxes. I did that a few years ago with a $25K pension cash out.

At your income level you could lose about 1/3 of that money to the IRS and Arizona.

 

[Dandy Don]

You can subscribe to any of the online tax preparation software sites, such as TurboTax or others, and plug your numbers in to get a realistic estimate of what your liability will be.