IRA Rules

Archive for the ‘IRA Distrubution Rules’ Category

Question: What decide which bracket the traditional IRA will be taxed on at distribution?

I know it’s taxed when you get the money from traditional IRA, but is it taxed on your current income bracket or the amount of money you take out?

say you retire earlier and sell your biz.. so you pay no income tax, then even if you take out your IRA early, pay 10% penalty, do you still pay income tax on the money?

Answer: It will depend on what your total income is in the year you take the distribution.

Jump through hoops, no penalty

IRA Krakow’s Python 3 Tutorial Part 1 (Expressions)

Question: U.S. Retirement IRA Tax Question?

I am under 59 1/2 and have been taking IRA distributions for the last 15 years. These distributions were set up as substantially equal payments over my Life Expectancy (an annuity), and so were an exception to the usual rule prohibiting distributions before age 59 1/2.

The terms of the annuity exception to the 59 1/2 rule make it clear that there could be a recapture tax if the distribution method is changed. But there is a paragraph of Pub 590 that says I can make a one time switch to the required minimum distribution method at any time without incurring the additional tax.

My question:

Does this one time switch to the minimum distribution method exception allow me to discontinue my annuity distributions until I reach age 70 1/2 without incurring any additional taxes or penalties?

Answer: it would seem to me that at age 70 1/2 when the RMD comes into play since you already have a distribution set up that probably was at least the RMD, there would be no change

Investing & Money Management : What Is an RMD?