Hi, Normal IRA for Tax deduction?

Question

I want to Open General IRA Account for Tax deduction, I have couple of questions in mind:
1) What is the Maximum Gross Income to get Tax deduction?
2) If I withdraw this IRA money before retire, do they exist any penalty other than paying taxes to that amount?

Thanks

Answer 1

If you are covered by a qualified retirement plan at work (even if you don't participate in it) the deduction starts to fade at $50k and is gone at $60k (single filer).

If you remove funds prior to retirement age (59 1/2) you pay tax on the entire withdrawal as ordinary income plus a penalty tax of 10%. There are some exceptions to the 10% penalty, though, for first-time home-buyers, medical expenses that exceed 7.5% of your AGI, or total and permanent disability.

Answer 2

because of the fact which you have study up in this, you realize which you will take your loss once you liquidate all your IRA debts interior the three hundred and sixty 5 days you liquidate all of them. as a fashion to get any sort of deduction on your loss, you are able to desire to do away with each and every thing interior the comparable 3 hundred and sixty 5 days. in case you have different IRA debts, those could desire to be liquidated besides...each and every thing. permit me anticipate that it is your basically IRA, and which you have never taken something out of your IRA in the previous, which might substitute the muse of your investment. The stickler is this: the muse on your IRA is the completed of your nondeductible contributions. i will anticipate you have $25,000 in nondeductible contributions, it incredibly is the case in case you have a Roth IRA to illustrate. in the adventure that your foundation interior the IRA grow to be $25,000, and you liquidate it for $2,000, you are able to take a deduction for the lack of ability of $23,000 as a miscellaneous deduction on sort 1040 time table A. This deduction is project to a 2% of AGI floor. this could reason your itemized deductions to thoroughly wipe out your earnings tax criminal duty, whether you do no longer probably get a $23K deduction, because of the fact which you forgo the widely used deduction, plus you are able to desire to shave off 2% of your AGI. mutually as your earnings tax could be 0, you will nonetheless could desire to pay the $2 hundred penalty tax on the early distribution. regrettably, this loss can't be carried forward in case you are able to no longer take great thing approximately all of it.