Early Withdrawal ira

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pianoboy
Posts: 24
Joined: Thu Jan 19, 2017 8:49 pm

Early Withdrawal ira

Post by pianoboy » Mon Feb 19, 2018 5:10 pm

Can anyone tell much how much i would actually get if i were to withdrawal money from my roth ira.
I had it in 4 years.

Purchases & withdrawals+$14,484.99
Investment returns+$5,815.48

i live in PA in the 28% tax bracket

clydewolf
Posts: 732
Joined: Tue Jul 21, 2015 12:51 pm

Re: Early Withdrawal ira

Post by clydewolf » Mon Feb 19, 2018 6:00 pm

Your contributions to the Roth IRA can be distributed tax free and penalty free.

Any amount beyond your contributions is gains. If you are not 59-1/2 then they will be taxed and subject to a 10% early distribution penalty.

If you are age 59-1/2 and older the 10% early distribution goes away. But the gains would be taxable because you have not owned a Roth IRA for 5 years.

pianoboy
Posts: 24
Joined: Thu Jan 19, 2017 8:49 pm

Re: Early Withdrawal ira

Post by pianoboy » Mon Feb 19, 2018 6:02 pm

Im under the required age

Trying see how much i would actually get in that amount

pianoboy
Posts: 24
Joined: Thu Jan 19, 2017 8:49 pm

Re: Early Withdrawal ira

Post by pianoboy » Mon Feb 19, 2018 7:08 pm

Would this be correct?

Of the total 20300. I would pay an automatic 10% penalty.

Which would be 18269.

I would also have to pay 28% of the Investment returns+$5,815.48

Which would leave me with about 16600. Also do I pay that 28% right away or does it get paid when i do my taxes next year?

Alan S.
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Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: Early Withdrawal ira

Post by Alan S. » Mon Feb 19, 2018 7:45 pm

pianoboy wrote:
Mon Feb 19, 2018 5:10 pm
Can anyone tell much how much i would actually get if i were to withdrawal money from my roth ira.
I had it in 4 years.

Purchases & withdrawals+$14,484.99
Investment returns+$5,815.48

i live in PA in the 28% tax bracket
If "purchases and withdrawals" equates to the total of your regular Roth contributions less amount you have already withdrawn, then 14,485 can come out tax and penalty free anytime you want. Any amount withdrawn in excess of that will be subject to both tax and penalty. Therefore, if you just leave the 5815 in the Roth you won't pay any tax or penalty.

If you drained the entire Roth account, you would net 20,300 less 2210 (28% plus 10% * 5815) or 18,090.

You can offset the 2210 in taxes by simply increasing your salary withholding a small amount for the rest of the year.

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Flobes
Posts: 997
Joined: Tue Feb 16, 2010 12:40 am

Re: Early Withdrawal ira

Post by Flobes » Mon Feb 19, 2018 8:10 pm

pianoboy wrote:
Mon Feb 19, 2018 5:10 pm
...i live in PA in the 28% tax bracket
Are you subject to Pennsylvania income taxes?

pianoboy
Posts: 24
Joined: Thu Jan 19, 2017 8:49 pm

Re: Early Withdrawal ira

Post by pianoboy » Mon Feb 19, 2018 8:26 pm

Alan S. wrote:
Mon Feb 19, 2018 7:45 pm
pianoboy wrote:
Mon Feb 19, 2018 5:10 pm
Can anyone tell much how much i would actually get if i were to withdrawal money from my roth ira.
I had it in 4 years.

Purchases & withdrawals+$14,484.99
Investment returns+$5,815.48

i live in PA in the 28% tax bracket
If "purchases and withdrawals" equates to the total of your regular Roth contributions less amount you have already withdrawn, then 14,485 can come out tax and penalty free anytime you want. Any amount withdrawn in excess of that will be subject to both tax and penalty. Therefore, if you just leave the 5815 in the Roth you won't pay any tax or penalty.

If you drained the entire Roth account, you would net 20,300 less 2210 (28% plus 10% * 5815) or 18,090.

You can offset the 2210 in taxes by simply increasing your salary withholding a small amount for the rest of the year.

Im not over 59 1/2 and not had it in 5 years, though so wouldn't have i to pay the 10% penalty still if i take out the 14485? It does ask to put in a Federal withholding amount from 10-100%. I would guess just to leave at don't withhold
Last edited by pianoboy on Mon Feb 19, 2018 9:11 pm, edited 2 times in total.

pianoboy
Posts: 24
Joined: Thu Jan 19, 2017 8:49 pm

Re: Early Withdrawal ira

Post by pianoboy » Mon Feb 19, 2018 8:26 pm

Flobes wrote:
Mon Feb 19, 2018 8:10 pm
pianoboy wrote:
Mon Feb 19, 2018 5:10 pm
...i live in PA in the 28% tax bracket
Are you subject to Pennsylvania income taxes?
yes

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