Current Events > Roth IRA/401k - so you don't pay any taxes on withdrawal?

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What if you live in Texas, where there is no income tax, and you just pay federal taxes on your contributions to your Roth IRA/401k, then when you turn 65, you retire and move to a high tax state, like California, then withdraw?

You pay no taxes to CA for that withdrawal?

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You pay taxes on your 401k when you withdraw

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Roth ira will tax what you put in but withdrawals are tax free at retirement. 401k withdrawals are taxed. But I assume their taxed as capital gains, so of you don't have any income I think the first 50k of annual withdrawals might be tax free?

I'm not really sure on that, but you can withdrawal your entire roth tax free if you're of retirement age.

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Future_Trunks posted...

you're not taxed on what you put into a roth ira, that shit makes no sense.

Well, contributions aren't tax deductible into a roth like it would be into a 401k or traditional ira. Meaning you pay tax on that income upfront rather than on the realized captial gains later.

So yes, you do pay income taxes on what you contribute to a roth, where as you would not into a 401k

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Future_Trunks posted...

you worded it all fucked up, making it sound like you're taxed when you make contributions.

Maybe, I guess. I was for simplicity's sake

Future_Trunks posted...

also the traditional 401k distributions aren't taxed like capital gains, they're taxed like income

Damn, really? What a terrible deal

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So since nobody knew, I asked a knowledgeable expert. The answer is you absolutely pay the state taxes on your withdrawals; you just dont pay federal taxes.

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