roth ira contributions withdrawal
ROTH IRA Withdrawal- I need to withdraw my contribution only — I’m not yet 59. Will I’ve to pay tax on this?
I would like to withdraw my contributions only from Roth IRA. I was told by ETRADE that they will send a 1099 to IRS and I need to pay tax/penalty unless I tell the IRS that I’m withdrawing my contributions only. Does anyone know what forms I need to file with tax so that I don’t have to pay tax and penalty (I’m under 59 and not under Disability). Thanks so much for your help.
All withdrawals from a Roth are tax free.
You can withdraw your contributions and avoid the 10% if it has been 5 years since you made the contribution. Otherwise, if it’s been less the 5 years you will be subject to the 10% penalty.
Etrade will 1099 you. You just need to include the distribution in your tax return on forms 8606 AND 5329. If you meet the 5 year rule, no tax or penalty will calculate on your return, but you will still need to include the distribution.
Read the article below, it will tell you everything you need to know.
