Taxes on IRA
If you take out money from your IRA or 401K for education purposes, do you incur the 10% penalty
Is there a limit on how much you can take out?
If you take out money from your IRA or 401K for education purposes, do you incur the 10% penalty
Is there a limit on how much you can take out?
Permalink Submitted by Alan - IRA critic on Thu, 2014-02-20 23:31
As long as the expenses meet the definition of qualified higher education expenses, there is no penalty and no dollar limit. But the expenses must be paid in the same year as the IRA distribution.
Permalink Submitted by mk foss on Fri, 2014-02-21 17:46
Alan is correct – no penalty for amunts taken from an IRA for higher education. Use of a 401k gets a different result. You would need to roll a 401k distribution to an IRA before you could benefit from penalty-free treatment.Often “in-service” distributions are not available if you’re under 59-1/2. Higher education will qualify for a hardship distribution but penalties usually apply to hardship distributions.
Permalink Submitted by Samantha Bache on Sat, 2014-02-22 09:14
A reviled credit product, refund anticipation loans or tax refund loans, was killed off last year via regulatory actions. It was intended to stop people borrowing against their tax refunds. However, numerous slightly different goods offering the same thing are alive and well.