How much tax will I pay if I take a lump sum distribution from my fathers pension death benefit?

Asked in Brooklyn, NY - almost 4 years

My father passed away and I was his beneficiary on his pension. Part of the money is a tax-free distribution, with a larger amount being taxable distribution, which I would be required to pay taxes on. I need to take this as a lump sum, it says they will take 20%, but how much more will I have to pay on that money, besides that. I have 3 children, and both myself and my husband both work. I am worried about my tax liability.

Attorney Answers (1)

Ronald Anthony Sarno

New York Litigation Lawyer

Licensed in NY

0

1

Answered almost 4 years ago. Before you take anything out confer with a tax accountant. In general the 20% withholding is an estimate of what you will owe at the end of the year. The actual tax due both state and federal tax authorities may be less when all of your deductions and exemptions are calculated. Also the addition of this withdrawal adds to your salary income, and may increase your tax liability. Some recommended tax strategies: filing your return as married but filing single, so that only your income takes the hit and you put the three dependents on your return, and/or taking two distributions one in 2009 and one in 2010. Another strategy is you may be able to use income forwarding to reduce your tax burden. If you access my avvo profile, you will find my NYC contact information. I am available for consultation on tax planning and also do state and federal income tax returns at a competitive price.

You might find my legal guide on selecting and hiring a lawyer helpful.
You might find my legal guide on Is it Legal? Is it Illegal? helpful.
You might find my legal guide on the understanding the different court systems helpful.
You might find my legal guide on legal terms used in litigation helpful
(Even if you are not filing a lawsuit this information can be useful).

You might find my legal guide on taxes helpful.
You might find my legal system on NY court system helpful.

You might find my legal guide on Estate Litigation (with a will) helpful.
You might find my legal guide on Estate litigation (without a will) helpful.

LEGAL DISCLAIMER
Mr. Sarno is licensed to practice law in NJ and NY. His response here is not legal advice and does not create an attorney/ client relationship. The response is in the form of legal education and is intended to provide general information about the matter in question. Many times the questioner may leave out details which would make the reply unsuitable. Mr. Sarno strongly advises the questioner to confer with an attorney in their own state to acquire more information about this issue.

Flag

Mark as helpful

How much tax will I pay if I take a lump sum distribution from my fathers pension death benefit?

Attorney Answers (1)

Ronald Anthony Sarno

0

1

Flag as objectionable

Related Questions

Not what you're looking for?