I have a question about IRA withdraw penalties. If I withdrew Roth IRA funds of amounts I contributed four years ago, why am I being charged IRA withdraw penalties now?
You must have a Roth IRA for five years before you can take a qualified distribution. It doesn’t have to be the same Roth IRA as the one you’re withdrawing from.
The five-year period starts on Jan. 1 of the first tax year you opened and funded a Roth IRA. It ends five years later on Dec. 31. This is a lifetime qualification. So, after you meet the holding-period requirement once for the first Roth IRA you own:
- You’ll have met the holding periods for all Roth IRAs you own.
- Regarding IRA withdraw penalties, you can take out earnings tax-free and penalty-free after age 59 1/2 — or earlier if you qualify for a Form 5329 exception.
Congratulations on the Bonus! Learm more about the tax rate at H&R Block - whether you receive a holiday or cash bonus, it will apply to you.
Many entrepreneurs find themselves wondering exactly how Bitcoin is taxed. Our H&R Block Tax Pros are prepared to assist self-employed filers with Bitcoin taxation.
What is Cryptocurrency? Bitcoin, Litecoin, and the like leave many wondering how to classify this new form of investment. Find the answer at H&R Block.
If you are selling items at a farmer's market, learn how to file your taxes with H&R Block. From cash income to bartering, these tax tips will help.