Distributions from retirement plans including solo 401(k) plans are taxed at earned income tax rates not capital gain tax rates. Therefore, the solo 401k distribution may bump you into a higher tax bracket. For taxable years beginning in 2023, see the following tax rate tables to help you plan for making solo 401k distributions in 2023.
Tax brackets 2023 (Source: https://www.irs.gov/pub/irs-drop/rp-22-38.pdf)
| Tax Rate | Single | Married filing jointly | Married filing separately | Head of household |
|---|---|---|---|---|
| 10% | $0 to $11,000. | $0 to $22,000. | $0 to $11,000. | $0 to $15,700. |
| 12% | $11,001 to $44,725. | $22,001 to $89,450. | $11,001 to $44,725. | $15,701 to $59,850. |
| 22% | $44,726 to $95,375. | $89,451 to $190,750. | $44,726 to $95,375. | $59,851 to $95,350. |
| 24% | $95,376 to $182,100. | $190,751 to $364,200. | $95,376 to $182,100. | $95,351 to $182,100. |
| 32% | $182,101 to $231,250. | $364,201 to $462,500. | $182,101 to $231,250. | $182,101 to $231,250. |
| 35% | $231,251 to $578,125. | $462,501 to $693,750. | $231,251 to $346,875. | $231,251 to $578,100. |
| 37% | $578,126 or more. | $693,751 or more. | $346,876 or more. | $578,101 or more. |
Federal
