Home
Forums
New posts
Search forums
What's new
New posts
Latest activity
Members
Current visitors
Log in
Register
What's new
Search
Search
Search titles only
By:
New posts
Search forums
Menu
Log in
Register
Install the app
Install
Home
Forums
Brown Cafe UPS Forum
UPS Retirement Topics
UPS Special Pension Buyout Offer - December 2016
JavaScript is disabled. For a better experience, please enable JavaScript in your browser before proceeding.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an
alternative browser
.
Reply to thread
Message
<blockquote data-quote="Bagels" data-source="post: 2390195" data-attributes="member: 43436"><p>You'll eventually pay taxes on the income, the only question is when.</p><p></p><p>- If you open an IRA and have UPS directly deposit the funds into it, no taxes will be withheld. You will pay taxes on your annual distributions, however (in other words, if you receive $20,000 and withdraw $5,000 in 2017, you'll pay taxes on $5,000).</p><p></p><p>- If UPS sends you the funds directly, 20% will be withheld for taxes. Keep in mind this is merely a deposit toward your annual tax liability, which may be greater or less than the funds withheld. So if you receive $20,000 and deposit the entire amount into your bank account, it will be considered 2016 income. Depending on what your liability for the year is, you may get some (or all) of the withholding back.</p><p></p><p>- The 10% penalty will apply. To avoid it, you'll need to include Form 5329 when you file your taxes. Keep in mind that the IRS' benchmark for disability may not be the same as Social Security's.</p><p></p><p>- For questions, seek consultation with an accountant. Keep in mind that it'll cost you a few hundred bucks, and then another few hundred bucks to complete your tax return.</p><p></p><p>- My advice is to skip the buyout. While a few extra bucks now might seem nice to pay down debt, go on a shopping spree or take a nice trip... once the money's gone, it's gone.</p></blockquote><p></p>
[QUOTE="Bagels, post: 2390195, member: 43436"] You'll eventually pay taxes on the income, the only question is when. - If you open an IRA and have UPS directly deposit the funds into it, no taxes will be withheld. You will pay taxes on your annual distributions, however (in other words, if you receive $20,000 and withdraw $5,000 in 2017, you'll pay taxes on $5,000). - If UPS sends you the funds directly, 20% will be withheld for taxes. Keep in mind this is merely a deposit toward your annual tax liability, which may be greater or less than the funds withheld. So if you receive $20,000 and deposit the entire amount into your bank account, it will be considered 2016 income. Depending on what your liability for the year is, you may get some (or all) of the withholding back. - The 10% penalty will apply. To avoid it, you'll need to include Form 5329 when you file your taxes. Keep in mind that the IRS' benchmark for disability may not be the same as Social Security's. - For questions, seek consultation with an accountant. Keep in mind that it'll cost you a few hundred bucks, and then another few hundred bucks to complete your tax return. - My advice is to skip the buyout. While a few extra bucks now might seem nice to pay down debt, go on a shopping spree or take a nice trip... once the money's gone, it's gone. [/QUOTE]
Insert quotes…
Verification
Post reply
Home
Forums
Brown Cafe UPS Forum
UPS Retirement Topics
UPS Special Pension Buyout Offer - December 2016
Top