Withdrawing from an IRA (Individual Retirement Account) before Retirement

For the 2010 tax year, the due date for all contributions into an IRA account and withdrawals out of an IRA account is April 18, 2011.

There is a 6% excise tax on all contributions to an IRA account that are not withdrawn by April 18, 2011.

In addition, any withdrawal from an IRA account before the age of 59 ½ is included in that tax years gross income with an additional 10% tax penalty. There are exceptions to this penalty however, give me a call to discuss what those are.

Keep in mind the advantages of having an IRA:

-        Contributions to an IRA are fully or partially tax deductible

-        Amounts, earned and gained, in your IRA account are not taxed until you begin withdrawing

If you don’t have an IRA, you can start one, as long as:

-        You (or your spouse if you file as married, joint) received taxable income during the 2010 tax year and,

-        You are not 70 ½ by the end of the year

There are also many kinds of IRA’s. Often times your company provides an option. You can also open an IRA on your own, through a bank or your stock broker. There are simple IRA’s, Roth IRA’s, Individual Retirement Annuities, SEP (simplified employee pension), Retirement bonds, etc.

Saving for your future retirement is important. The laws, taxes, benefits and options can be overwhelming. I can help make the best decision for you, based on your income, lifestyle, circumstances and goals. 

For a free Financial Planning Consultation you may contact me by clicking here; Tax Planning Granada Hills or call: 818.368.5374.