IRA Rules

Archive for September, 2005

IRA Investing

Personal Finance & Investing : How Does a Roth IRA Work?

Question: More free tax advice re penalty for “early withdrawal on savings”?

I really don’t think my taxes are complex enough to take them to a professional; I’ve already pretty much established that I cannot beat the standard deduction. However, I also feel I am in a bit of a grey zone when I read some of the rules in the book. For “penalty on early withdrawal on savings” can I claim the 10% I paid last year for raping & pillaging my IRA? I’m pretty sure that I cannot, but it never hurts to find out from people who know about this kind of stuff. Thank you.

Answer: You’re correct, you can’t include the penalty for early withdrawal of your IRA in the adjustments area of your return. There are a few exceptions though to having to pay the penalty, so be sure to research those first to see if you qualify for any of them.

Roth vs. Tradtional 401K — Which Should I Choose