I sold $5,000 from a 403b to help finish renovations for a mother-in-law suite. I went over budget by $4,000. Once it is finished in about 3-4 weeks, i will get $1,500-$1,600/month in rent.
The representative said that 20% of federal income tax is withheld and that's it. No payroll taxes are withheld. Why are no payroll taxes withheld?
I do have to pay a 10% penalty when I pay my taxes in March 2019. However, we originally deposited the money in 2015 when we were strategically avoiding the 25% tax bracket. Now we are claiming the money when we are in the 12% tax bracket, so the 10% penalty doesn't seem like that big of a deal.
