Are 401k and other retirement accounts subject to regular federal income taxes or long-term Capital Gain tax?
Answers:
regular federal (and state as well) income taxes. The IRS would own no approach of knowing how much of the retirement income you receive respectively year would be from trilby gain, interest, dividends, other, so they levy it at regular due rate.
The above answer is correct for federal taxes. State taxes depend on the state. Illinois, for example, does not (at present) tax retirement plan income (social shelter, IRA, 401k, or pension).
Withdraws, they are subject to taxes. If you are elder than 59 1/2 you will not incur in a penalty(10%), for younger ethnic group. On the amounts you embezzle out, you hold to pay cheque taxes, income, at your later, Tax bracket.
Regular income taxes.