Traditional IRA Contributions

Forum|Forum|1 year ago
March 12, 2025
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Hi all,

My mom is 68 and has been making after-tax contribution to her Traditional IRA since 2011 received adjustment on her tax from 2011 to 2015. She doesn't receive adjustments from 2016 on words on her tax but has form 8606. Can she withdraw only the after-tax contribution from 2011 or from 2016 to date and if she withdraws only the after-tax contributions will she be taxed on the total XX amount?

I am similar situation but I'm 45, my guess I won't be able to withdraw the after-tax contributions unless I'm 59 1/2?

I don't want her taxes to get complicated with pre-tax and after-tax amounts when she actually starts to withdraw from her Traditional IRA. Please provide some guidance on what would be the best way to handle this. Thanks

DanaB27

No, you cannot only withdraw the after-tax funds out of the traditional IRA. If you have a mix of pre- and after-tax then the pro-rata rule applies. This means that with each distribution/ conversion you will have a taxable and nontaxable part. The nontaxable part is calculated on Form 8606.

TurboTax will handle this for you, all you need to do is enter the Form 1099-R and then answer a few questions about the basis and the value of all traditional/SEP/SIMPLE IRAs on the end of the year. Then TurboTax will fill out Form 8606 for you.

If you withdraw from your traditional IRA before 59 1/2 and have a mix of pre-tax and after tax then the 10% early withdrawal penalty applies on the taxable part unless you have an exception.

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