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    LITLK's Avatar
    LITLK Posts: 7, Reputation: 5
    New Member
     
    #1

    Apr 3, 2007, 08:02 AM
    Needed ira early tax penalty must be paid from ira too
    :( Unfortunately My Retirement Was Placed In An Ira.

    Thought I Would Work Longer. Unemployed Only Money Is My Ira I Have Been Using It Now For Three Years To Live On And I'm Currently 58.

    Each Year I Owe Taxes On The Previous Year And Penalties, But My Only Money Is The Ira So I Must Take Out Of Ira Once Again To Pay These.

    How Do I Stop This Cycle. It Is My Money And Circumstances Of Health And Unemployment Prevent An Income. Do I Take It Out Or Live On The Streets?

    Does IRS Give Any Break For Those Unable To Work Prior To 59 1/2 Who's Only Money Is The Ira?

    Thank You In Advance For Your Assistance
    Mobea's Avatar
    Mobea Posts: 220, Reputation: 15
    Full Member
     
    #2

    Apr 3, 2007, 01:05 PM
    1. Sorry about your misfortune in life. It is hard to have to draw from your IRA, but you got to do what you got to do. If you are going to draw out of it , why not draw out a big enough chunk at once to last you for awhile instead of drawing out a little at a time? Maybe enough to get you by, say two years. That way you won't have to draw out of it every year and paying the penalties every year. It's kind of like going to an ATM that charges you every time you need to draw out money. Draw out once for a larger amount instead of 2 or 3 times.
    2. Have more federal income tax withheld when you withdraw from your IRA. A good rule of thumb is 20% PLUS 10% to cover the penalty. Depending on the rest of your income for the year, you may even get a refund back. Depends on your tax bracket at the time. Hang in there, you're almost there.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,818, Reputation: 846
    Senior Tax Expert
     
    #3

    Apr 13, 2007, 12:00 PM
    Agreed!

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