1 Reply Latest reply on Apr 26, 2011 5:37 PM by Chrysalis

    Taxes on withdrawls

    Arnie
      I recently withdrew funds to pay off a small remaining balance on my mortgage.  The withdrawl was taxed as ordinary income.  Is there a method or process by which such a withdrawl might be differently taxed in a way benefiting me?
        • Re: Taxes on withdrawls
          Chrysalis
          If you paid tax on the money before you put it into a retirement account (i.e., via a Roth IRA), you don't have to pay any tax when you withdraw it. Otherwise, you have to pay tax when you withdraw it, no matter what the reason. There are a few exemptions for the 10% early withdrawl penalty if you are younger than 591/2, but no exemptions for the tax itself.