Roth IRA, Traditional IRA, 401K » penalties http://www.iraroth.net IRA Questions and Answers Tue, 17 Jan 2012 00:09:43 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 Q&A: In my case, can I take the owed taxes from the Roth IRA to pay the taxes due without incurring penalties, etc? http://www.iraroth.net/2011/03/qa-in-my-case-can-i-take-the-owed-taxes-from-the-roth-ira-to-pay-the-taxes-due-without-incurring-penalties-etc/ http://www.iraroth.net/2011/03/qa-in-my-case-can-i-take-the-owed-taxes-from-the-roth-ira-to-pay-the-taxes-due-without-incurring-penalties-etc/#comments Mon, 21 Mar 2011 22:24:05 +0000 admin http://www.iraroth.net/2011/03/qa-in-my-case-can-i-take-the-owed-taxes-from-the-roth-ira-to-pay-the-taxes-due-without-incurring-penalties-etc/ Question by Sterling J: In my case, can I take the owed taxes from the Roth IRA to pay the taxes due without incurring penalties, etc?
I converted a Traditional IRA to a Roth IRA. The federal taxes were withheld – all is well with that (I think). The state taxes were not withheld. Now I owe the state a bunch of money. Can I take the owed amount (or less) from the Roth IRA to pay the taxes due without incurring penalties, etc? Would this be considered a “premature withdrawal”?

Best answer:

Answer by chatsplas@sbcglobal.net
Don’t do it.
Yes it would be premature withdrawal.
You know you can undo the conversion? And convert part of the money this year and part next year. Up to 4/15 you can.

Give your answer to this question below!

]]> http://www.iraroth.net/2011/03/qa-in-my-case-can-i-take-the-owed-taxes-from-the-roth-ira-to-pay-the-taxes-due-without-incurring-penalties-etc/feed/ 2 Roth IRA early distributions‏ http://www.iraroth.net/2010/02/roth-ira-early-distributions%e2%80%8f/ http://www.iraroth.net/2010/02/roth-ira-early-distributions%e2%80%8f/#comments Thu, 04 Feb 2010 22:03:36 +0000 admin http://www.iraroth.net/?p=216 Hello. I have read IRA distribution rules over and over and understand the many examples clearly, but none applies to MY situation.

I have had a Roth IRA since 1999, when I converted to it. Since then I have made the maximum after tax contributions allowable (into an aggressive stock fund), and my balance is now around $90K. I am considering withdrawing all of my contributions because I fear being wiped out by the economy, and I cannot sit back and watch that happen. I cannot move the money to a “safe” harbor because all the safe funds (such as money market) at Vanguard are closed to new investors. What would the penalty be if I pull my contributions, if there is one? Must I wait five years from the year of each contribution to withdraw penalty free (in other words, can I withdraw only my contributions through 2004) or am I free from withdrawal restrictions on my entire after tax contributions? Please clarify.

]]> http://www.iraroth.net/2010/02/roth-ira-early-distributions%e2%80%8f/feed/ 1 Is there a maximum amount you can withdraw from IRAs at age 71 without penalties? http://www.iraroth.net/2010/01/is-there-a-maximum-amount-you-can-withdraw-from-iras-at-age-71-without-penalties/ http://www.iraroth.net/2010/01/is-there-a-maximum-amount-you-can-withdraw-from-iras-at-age-71-without-penalties/#comments Sat, 23 Jan 2010 00:36:37 +0000 admin http://www.iraroth.net/2010/01/is-there-a-maximum-amount-you-can-withdraw-from-iras-at-age-71-without-penalties/ My husband wants to cash in two IRAs that are earning very low interest. He will use the money for buying a house to fix up for rental. Would it be best to do this or to take out the minimum amount and cash in regular CDs which have not matured?

Also, does the date the IRAs were purchased matter? Other smaller IRAs were combined with these about a year ago – could that be a problem?

Thanks for your help!

]]> http://www.iraroth.net/2010/01/is-there-a-maximum-amount-you-can-withdraw-from-iras-at-age-71-without-penalties/feed/ 6 When withdrawaing an IRA early what amount should be withheld to avoid penalties from the state or the IRS? http://www.iraroth.net/2010/01/when-withdrawaing-an-ira-early-what-amount-should-be-withheld-to-avoid-penalties-from-the-state-or-the-irs/ http://www.iraroth.net/2010/01/when-withdrawaing-an-ira-early-what-amount-should-be-withheld-to-avoid-penalties-from-the-state-or-the-irs/#comments Wed, 06 Jan 2010 19:41:56 +0000 admin http://www.iraroth.net/2010/01/when-withdrawaing-an-ira-early-what-amount-should-be-withheld-to-avoid-penalties-from-the-state-or-the-irs/ I am looking into withdrawing my IRA early, I was told to withhold an amount in order not to be penalized later on by the state and the IRS, what percentage should it be?

]]> http://www.iraroth.net/2010/01/when-withdrawaing-an-ira-early-what-amount-should-be-withheld-to-avoid-penalties-from-the-state-or-the-irs/feed/ 6 In my case, can I take the owed taxes from the Roth IRA to pay the taxes due without incurring penalties, etc? http://www.iraroth.net/2009/12/in-my-case-can-i-take-the-owed-taxes-from-the-roth-ira-to-pay-the-taxes-due-without-incurring-penalties-etc/ http://www.iraroth.net/2009/12/in-my-case-can-i-take-the-owed-taxes-from-the-roth-ira-to-pay-the-taxes-due-without-incurring-penalties-etc/#comments Wed, 16 Dec 2009 16:42:49 +0000 admin http://www.iraroth.net/2009/12/in-my-case-can-i-take-the-owed-taxes-from-the-roth-ira-to-pay-the-taxes-due-without-incurring-penalties-etc/ I converted a Traditional IRA to a Roth IRA. The federal taxes were withheld – all is well with that (I think). The state taxes were not withheld. Now I owe the state a bunch of money. Can I take the owed amount (or less) from the Roth IRA to pay the taxes due without incurring penalties, etc? Would this be considered a “premature withdrawal”?

]]> http://www.iraroth.net/2009/12/in-my-case-can-i-take-the-owed-taxes-from-the-roth-ira-to-pay-the-taxes-due-without-incurring-penalties-etc/feed/ 3 If depleting your 401K while unemployed , any hardship criteria to offset taxes and penalties for early WD ? http://www.iraroth.net/2009/12/if-depleting-your-401k-while-unemployed-any-hardship-criteria-to-offset-taxes-and-penalties-for-early-wd/ http://www.iraroth.net/2009/12/if-depleting-your-401k-while-unemployed-any-hardship-criteria-to-offset-taxes-and-penalties-for-early-wd/#comments Sun, 06 Dec 2009 22:31:46 +0000 admin http://www.iraroth.net/2009/12/if-depleting-your-401k-while-unemployed-any-hardship-criteria-to-offset-taxes-and-penalties-for-early-wd/ In order to avoid bankruptcy, during a 9 month period of unemployment, It was necessary to take early distribution monthly from 401K for income. Are there any hardship provisions for this type of “forced” early distribution?

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