I am 65 years old and have several IRAs. One is more than 5 years old, the others are less than 5 years old. Can I withdraw from all of my IRAs penalty and tax free?
I am 65 years old and have several IRAs. One is more than 5 years old, the others are less than 5 years old. Can I withdraw from all of my IRAs penalty and tax free?
No, your retirement account distributions will not be tax free. Since you are over 59 1/2, you are not subject to an early withdrawal penalty, but money taken out of your IRA's or 401k's etc. is taxable income. If you take money out, you will get a 1099R that must be entered on your tax return. You will be taxed at the rate for your income bracket on that income.
To enter your retirement income, Go toFederal> Wages and Income>Retirement Plans and Social Security>IRA401 k) Pension Plan Withdrawals to enter your 1099R.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
You can withdraw from a Traditional IRA tax free only if your IRA basis is not less than the amount withdrawn plus the most recent year-end value of the IRA,.
You can only make new contributions to a traditional or Roth IRA if you have compensation from working -- this generally means W-2 wages or schedule C self-employment.
For a traditional IRA, all withdrawals are always taxable, since you did not pay tax on the contributions. You will not pay the additional 10% penalty for early withdrawal at your age.
If you have a Roth (after-tax) IRA, withdrawals are tax free if it is at least 5 years since you opened your first Roth IRA (traditional IRAs don't start this 5 year clock). The 5 year clock on Roth IRAs applies once in a taxpayer's life. If you have more than one Roth IRA, look at the date that the earliest one was opened.