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I heard it can be done. I always assumed when you take money out it is considered income and then taxed.

2007-02-16 00:11:27 · 4 answers · asked by InvisibleWar 2 in Business & Finance Personal Finance

This would be for educational use. I guess as a student your taxes wouldn't be that high anyways and would be returned to you as a refund. This assumes you are a full time student and have little to no income.

2007-02-16 00:13:37 · update #1

4 answers

You're allowed to take money out of a Roth for educational purposes without the IRS imposed "pre retirement/59 1/2 penalty". The penalty is normally 10%, but the IRS allows for certain exceptions. I'd call either your financial advisor or who ever handles your Roth or your tax guy for the final say so though.

2007-02-16 00:26:05 · answer #1 · answered by sharkbite321 3 · 0 0

Here's what I know.... a traditional ira has to stay put for a certain number of years, if u pull from that before the time is up you are penalized and taxed. (penalty is outrageous)

A roth ira, after a year, you can pull what you have put in without being taxed or penalized. If you take the growth, you're penalized.

I hope that helps.

2007-02-16 00:18:46 · answer #2 · answered by tiffany6322 4 · 0 0

Call your financial provider and make the withdrawal request.

Your after tax contributions to a Roth IRA are always eligible for withdrawals (it's your growth that is subject to the age 59.5 rules).

2007-02-16 07:04:09 · answer #3 · answered by derek 4 · 0 0

You can always remove your principal from your Roth, without penalty (or taxes). You have already paid taxes on that money.

You cannot remove your investment gain without penalty and taxes.

My suggestion would be to remove the principal, and leave the investment gain to compound for decades.

2007-02-16 00:26:53 · answer #4 · answered by Quixotic 3 · 1 0

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