Early Withdrawal Penalty On Ira

January 25th, 2008

Question: Roth IRA – Early Withdrawal – Penalty?

Hi,

I have question about Early Withdrawal of Roth-IRA.

Last year 2007 I was planning to buy house and taking that in consideration I withdrew my Roth IRA prematurely (Before 5 yrs of opening it). About $4100. But after housing market meltdown I didn’t buy house. Now I have this money sitting in my saving account.

I have couple of questions based on this:

1. Do I have to pay penalty or tax in 2007 taxes for Early Withdrawal?
2. Can I invest this amount back into Roth-IRA in 2008 before Apr-15-2008 to save on 2007 taxes or penalty?

Thanks for your help,

Lee

Answer: Yes
Yes

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