I (30yrs) withdrew funds from a Roth IRA that was opened a year ago. Any penalty/tax implication. No earnings was made on my contributions..
2006-11-02 06:02:27 · 6 answers · asked by spagi2010 1 in Business & Finance ➔ Taxes ➔ United States
In a Roth, you can withdraw any amount you put in tax free...if you take out more (contributions+earnings) then the amount above contributions (earnings) is taxable. If you are younger than 59 1/2...which you are...then it would also have a 10% penalty. But! Since you are only taking out contributions...no worries.
2006-11-02 07:13:58 · answer #1 · answered by Dana B 2 · 1⤊ 0⤋
Simply put, no. Why? Because the account had no earnings. No earnings, no taxes....period.
Exception: If the account was funded by a rollover from an IRA, then because is was less than 5 years ago, you will be subject to a 10% penalty to all amounts pulled out that were rolled-over.
Even though there may be no direct tax implications, this "pull-out" will effect any "Retirement Savers Credit" (see line 2 of form 8880). Finally, the Roth account fiduciary may charge you a fee for the pull-out or termination of the IRA.
2006-11-02 15:36:26 · answer #2 · answered by TaxMan 5 · 0⤊ 0⤋
If you took out the money in the same tax year it was opened, then you can report the distribution as a correction on form 8606.
Usually if you take then money out before age 59 1/2 there are penalties but since there were no earnings the penalties may be waived. The penalty does not apply to any part of a distribution that is tax free, such as amounts that represent a return of your cost
Also there are certain withdrawls from a roth IRA which are permitted before age 59 1/2.
They also should be described in the instructions for 8606
2006-11-02 07:31:51 · answer #3 · answered by goldenboyblue 3 · 0⤊ 0⤋
the guideline is the first day of the fifth year when you first set up a Roth. Thereafter, you are able to withdraw an volume as a lot because the entire of your contributions without penalty. you won't be able to withdraw any volume over that (i.e., account income) without penalty till you attain age fifty 9 a million/2.
2016-12-05 11:30:07 · answer #4 · answered by ? 4 · 0⤊ 0⤋
You can withdraw your contributions at any time without tax or penalty. You are only taxed (and penalized) if you withdraw earnings.
2006-11-02 06:07:20 · answer #5 · answered by Wayne Z 7 · 1⤊ 0⤋
Try 20% on for size.
2006-11-02 06:05:44 · answer #6 · answered by Anonymous · 0⤊ 3⤋