closing ira
im of age and closing out ira went to bank they said you want the taxes sent in or you do take care of it. i do not do make enought to file taxes so how do i pay taxs on the iras? or do i ?/ help thxs
im of age and closing out ira went to bank they said you want the taxes sent in or you do take care of it. i do not do make enought to file taxes so how do i pay taxs on the iras? or do i ?/ help thxs
Permalink Submitted by Alan - IRA critic on Mon, 2013-05-20 19:57
Tax withholding is optional. If you add the IRA distribution to your other income you will have to determine if you are still under the filing limit. There is also a 10% penalty if you are under 59.5 and not disabled, and there are a few other exceptions to the penalty as well. If you do not have to file, but owe the penalty, you can file Form 5329 by itself to either pay the 10% penalty or claim an exception to the penalty. The bank knows your date of birth and will code the 1099R to reflect no penalty if you are over 59.5.
Permalink Submitted by barb dillard on Mon, 2013-05-20 22:37
What do count as income on the ira the tax amount or interest to my income?? Or total the ira amount?? I just emailed.
The post.
Permalink Submitted by Alan - IRA critic on Mon, 2013-05-20 23:03
When you remove funds from a traditional IRA, the entire amount taken out is taxable unless you made prior non deductible contributions to the IRA and filed Form 8606 to report them. Of course, you have exemptions and deductions that may reduce the taxable amount to 0.