Start simple ira and then withdrawal
If a client starts a SIMPLE IRA for 2021 with 5k and then in June of 2022 and he is already 591/2, Can he take a withdrawal in 2022 without being penalized (not the 10% but getting a tax deduction and then withdrawing)?
Thank you,
Doug
Permalink Submitted by Alan - IRA critic on Mon, 2021-12-27 23:27
The 10% would be 25% if the client had not reached 59.5. As is the client will have to report 2022 taxable income for the distribution, but the SIMPLE 2021 contributions will be deductible. Note that the client cannot do a 60 day rollover of this distribution to any IRA other than another SIMPLE IRA because the 2 year waiting period will not have been completed.