money would be for home improvements.
2006-08-04 15:44:32 · 9 answers · asked by Richard H 1 in Business & Finance ➔ Personal Finance
if you use less than 10% of it, no tax.
2006-08-04 15:48:19 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Yes, you would be taxed if you withdrew the money from an IRA or 401 K plan with a 10% penalty for early withdrawl if your younger than a certain age. Your better off borrowing against the account, take a home equity loan vs taking the money from a retirement account.
I would talk to your bank and see what they can recommend to you so you do not have to be penalized. Since retirement money grows tax free, you dont want to take it out till you need it later in life.
2006-08-04 15:57:43 · answer #2 · answered by besttobefriends 2 · 0⤊ 0⤋
If you withdrew money from a tax-deferred retirement fund (it went into the fund through work, for example, without having withholding taxes taken from it), it will be reported as a disbursement by the fund and you will need to pay taxes on it as income. If you are not old enough to receive regular disbursements from your fund, they will hold back about 20% of what you request to have taken out for taxes and penalty.
Do you have equity in your home? I would get a home equity line of credit or refinance the house before I took money from retirement. Usually the interest payments on HELOC and refinance are tax deductible.
2006-08-04 15:52:42 · answer #3 · answered by Novice restauranteur 3 · 0⤊ 0⤋
Gosh, your question does not give enough information for a good answer.
If you mean your own IRA plan, then you need to read the fine print. In most cases, if you take it out before a certain age, 59.5 comes to mind, it is not only taxable since putting it in there was not taxed, but there are penalties on top of that.
Download from the irs the Pub 17 in pdf format, and look for IRA's, or Keogh or whatever it is. If you do not find an answer, ask again, but be specific as to nature of the plan and your age.
2006-08-04 15:51:11 · answer #4 · answered by retiredslashescaped1 5 · 0⤊ 0⤋
Most likely. Depends on what you're taking out, what you put in post-tax if anything, and how old you are.
If you're under 59-1/2 and are talking about withdrawing money from a 401K or IRA, and you are taking money out that you did not put in yourself and pay taxes on before you put it in, which would be most IRA's and 401K's, there will be a 10% penalty, plus income taxes, on what you take out. If you're at least 59-1/2, then you can take the money out without penalty, but it's still reported as income at tax time.
2006-08-04 15:53:11 · answer #5 · answered by Judy 7 · 0⤊ 0⤋
Several details are needed in order to answer your question.
Where is the money coming from? Your pension? An IRA? A 401(k)? Or just a savings account?
Did you withdraw the money this year?
How old are you?
2006-08-04 15:53:36 · answer #6 · answered by frugernity 6 · 0⤊ 0⤋
Simple answer -> It depends. And it depends on a lot of different things, none of which you mention in your question. Contact the company that holds your "fund" and ask them. They should give you general answers.
2006-08-04 16:42:08 · answer #7 · answered by TheSlayor 5 · 0⤊ 0⤋
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2006-08-04 21:04:53 · answer #8 · answered by home_insurance_expert 1 · 0⤊ 0⤋
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2006-08-04 21:27:46 · answer #9 · answered by Anonymous · 0⤊ 0⤋