I still don't get it clearly.
Let me put it this way:
1. 401k withdrawal amount: $15,000 ($2500x6, June-Dec. 2024)
2. Federal/state taxes due: $638 per each $2500 withdrawal, so the total is $3,828
If I choose to pay the taxes now, I would receive $1,862 each month after the tax.
If I choose to withhold the taxes until next year, I would receive $2,500 each month before tax.
Okay, let's say my taxable income for next year is $30,000, other than this 401k. So, my total taxable income is $45,000($30,000 plus $15,000), right?
Now, this is my question. During the tax return next year, should I pay the taxes on my taxable income of $45,000? Or should I pay $3,828 (401k withheld tax), in addition to the taxes on $45,000? I'm confused here.
