Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 04-05-2007, 01:16 AM
Junior Member
 
Join Date: Mar 2007
Posts: 10
How one can avoid the 10% penalty for early withdrawal of funds from an IRA?

Dear Taxguru,

What are the ways that someone can withdraw funds from their IRA prior to Age 591/2 without incurring a 10% early withdrawal penalty>

Tks a lot..


Last edited by gimini : 04-05-2007 at 01:19 AM.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 04-07-2007, 06:28 PM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,399
Blog Entries: 3
How can a taxpayer make a pension withdrawal & avoid a 10% early withdrawal penalty?

There are some exceptions to the penalties for withdrawal prior to taxpayer reaching age 59 1/2. These are as follows:

1. A distribution thats made due to a permanent or total disability.

2. A distribution thats made due to death of taxpayer.

3. A distribution that is made to someone else, usually an ex-spouse as part of the a qualified domestic relations order (QDRO), ie from a divorce agreement.

4. A distribution is made due to an IRS levy.

5. A distribution is made to pay for college education or higher education expenses for either the taxpayer, or spouse or their children.

6. A distribution that is made as part of a retirement plan that makes equal periodic payments over the life of the taxpayer. There are some rules pertaining to this exception and they have to be strictly adhered to.

7. A distribution is made towards the purchase of taxpayers first home!

8. A distribution is made to pay for medical insurance expenses paid for taxpayer and spouse and dependents.

9.A distribution is made to pay for taxpayers and dependents medical expenses.

If any distributions are made as a result of the above, the IRS will not impose the 10% early withdrawal penalty.

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #3 (permalink)  
Old 04-08-2007, 11:36 PM
Junior Member
 
Join Date: Mar 2007
Posts: 10
Thank you so much for your reply!



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply



Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning