Regular IRAs
Is there a minimun deduction you can take each year that is tax free? If so how much is it?
If a person that has a reg. IRA and has no other account to pay the taxes from, what would happen to the IRA? and if that person was to take distrabutions from their IRA, would our good and dear uncle garnish their SS, home and other properties for the tax bill?
Permalink Submitted by Alan Spross on Thu, 2008-07-10 20:52
I am not sure of enough details behind your post, but apparently you are concerned with IRA distributions, not the deduction of contributions to the IRA.
The taxes on your traditional IRA distribution depend on how much other income you have, as well as your exemptions and deductions. If you have enough total income other than SS, then part of your SS also can become taxable. You would have to estimate your next return in order to determine how much you can take from your IRA without incurring income tax. There is NO flat amount that is tax free.
If you do incur tax liability, the IRS has the authority to put a lien on your IRA account to collect your tax liability. This applies even if your distributions are required min. distributions after age 70.5.