Early Withdrawal

Archive for August, 2010

Question: Early Withdrawal From Roth Ira Question?

The value of my ROTH IRA currently is less than what it was when I first opened the account. If I withdraw the money today, will I still be charged an Early Withdrawal Penalty?

Answer: no. you’ve already paid taxes on your contributions. you can actually take your contributions out at any time for any reason completely tax free in a Roth. you only ever have to pay the penalty on earnings, which in your case doesn’t even apply.

but i would suggest that you use this as a last resort. this is a retirement account. you can’t just put all the money back into it if you change your mind.

there won’t be any tax penalties, but the opportunity cost will be huge.

The Balancing Act Show 1103 – Homewatch International

Question: Do I owe 10 Early Withdrawal Penalty on IRA conversion?

I’m under 59.5 years of age. Let’s say I withdrew $100 from State Retirement Agency. I rolled it over into Rollover IRA and then converted the entire $100 into Roth IRA. I understand I owe income tax on $100 conversion, but do I owe 10% penalty on $100 conversion due to my age?
Well, I received is if the state agency sent me the check 1st and then I send the IRA fiduciary company the check within 60 days. Does the 10% penalty still not hold?

Answer: again, a distribution is not a conversion
if you withdraw $100 from your IRA you will pay the 10% penalty if you are under 59 1/2
if you convert $100 to a Roth, you will pay the income tax on it for the conversion
but once you convert to the Roth it is no longer taxable upon distribution

Die 5 Biologischen Naturgesetze – Die Dokumentation

Question: Where are all the tax experts?

My tax situation is very complicated. I’m disabled and on Social Security although I am only 37. I am not employed however I do have an IRA that I pay taxes on every year because of withdrawals. This year, I returned to college and I have several student loans. Now tax time is approaching and I don’t know what to do. Am I disabled, a student, or a disabled student?

Answer: You would be a disabled student.

Tax Deduction Tips : Social Security Tax Tips