2007-01-09 02:11:16 · 8 answers · asked by coachesmummy@verizon.net 1 in Business & Finance ➔ Taxes ➔ United States
If the IRA is a Traditional IRA any amount that you draw out would be subject to income tax. That said you would have at least your standard deduction of $6,400and $3,300 personal exemption to reduce your tax liability. Depending on how much you are drawing from your IRA it could subject some portion of the SS to income tax but don't worry about that unless you are withdrawing more that $11,000 from the IRA. If some portion of your SS and IRA money does become subject to tax you would be at one of the lower rates.
You should be able to get somebody from the AARP in your area to help you with the tax issue.
2007-01-09 02:27:47 · answer #1 · answered by ? 6 · 1⤊ 0⤋
You don't have to claim your ss if you are unemployed. Income from earnings from an employer have to be claimed and if you make more than 12K ?( this number might be more - check this amount with IRS, you can find the number in your tax booklet) you may get your ss amount decreased. Your age allows you to withdraw from most IRA's without a penalty (you will know that from the rules that applied when you first started investing) but to the best of my knowledge this does not exempt you from having to pay taxes on the distributions. Your IRA financial institution will send you a 1099-R listing the amount of distributions/yr and whether it was distribution code T or Q. Also, there are many types of IRA's. Did you continue to make contributions in the year you received distributions? You probably should wait until you get your 1099-R and then seek a tax consultant...like HR Block or a qualified CPA. Also, special rules apply for people whose main home was in hurricane disaster areas.
2007-01-09 10:44:18 · answer #2 · answered by tyms_up 2 · 0⤊ 0⤋
Go to www.irs.gov. Publication 17. It gives the guidelines for income, age, and tax rate. You should be able to withdraw from your IRA at a low tax rate if at all. You should not gain any penalty.All sources of income must be considered.
Remember, there is a penalty in some IRA's, 401K's that have NOT had a withdrawal by age 70 1/2.
Seek the help of a tax professional.
2007-01-09 10:25:18 · answer #3 · answered by Wood Smoke ~ Free2Bme! 6 · 0⤊ 0⤋
I assume your only income is the IRA withrawal, your wages, and your SS benefits.
If the IRA withdrawal plus your wages totals more than $9,700, you are required to file a tax return. You will owe tax if you have no deductions other than your standard deduction and one exemption.
If your IRA withdrawal, plus wages, plus half of your Social Security payments is more than $25,000, then some of your Social Security will also be taxed.
2007-01-09 10:51:50 · answer #4 · answered by ninasgramma 7 · 1⤊ 0⤋
You can withdraw from your IRA and work and earn money tax free until you hit $ 9,700.00. At that point you will have to pay tax on whichever. Federal tax on the first 10,000 in taxable income is 10% at this point in time.
2007-01-09 10:36:51 · answer #5 · answered by acmeraven 7 · 0⤊ 0⤋
When Mathew mentions AAPR, he's talking about a program called TCE where trained volunteers do income taxes at no charge. You'd be eligible for their services. You can find more info on the irs.gov website if you type TCE or VITA into the search box at the upper right of the main page. The website with addresses of sites isn't up yet - it will be by February 1.
2007-01-09 11:53:33 · answer #6 · answered by Judy 7 · 0⤊ 0⤋
you have been a member of the ss and the ira and a only 70,5
years old widow?
you should write a book! it will be a bestseller,never mind the
taxes,move to monaco.
2007-01-09 10:18:12 · answer #7 · answered by Nanno D 3 · 0⤊ 2⤋
$9700, I believe.
The standard deduction for a single person over age 65 is $6400 and the personal exemption is $3300.
Assuming $9700 is above your required minimum distribution, anything up to this amount should be tax free.
2007-01-09 10:24:26 · answer #8 · answered by Wayne Z 7 · 1⤊ 0⤋