401k tax rate at 70 1 2
If you happen to hold stock of your company within your 401 (k) account, you could potentially treat the appreciation of that stock as a capital gain rather than ordinary income. The long-term (over a year) capital gain tax rate is 0%, 15% or 20%, depending on your tax bracket. The IRS requires that all 401(k) participants make annual withdrawals once they reach age 70 1/2. Choosing to take only the required minimum distribution ensures that you pay the minimum tax, but participants may also take more. Calculate your RMD using one of two life expectancy tables and your 401(k) account balance as of December 31 of last If you have an ownership stake of 5 percent or more in the firm that holds your 401k, then your RMDs begin when you turn 70 1/2 even if you are still working. Withdrawals