Welcome to the Personal and Business Financial Forum started by me, Andrew Jordan, CPA. I'm a financial professional with over 25 years experience working with businesses and individuals as a CPA, Financial Manager and Consultant.
Feel free to post your questions or comments. My areas of expertise are tax, accounting, general business management and finance for businesses and individuals. I can also be reached at ajordancpa@comcast.net for additional information. Look forward to hearing from you!
Best Regards,
Andrew Jordan, CPA, MSF, CGMA
About Me
- andrewjordancpa.com
- Andrew J. Jordan, CPA, MSF is a licensed Certified Public Accountant. He achieved a successful career as a CPA, Financial Manager and Consultant for a variety of large and small businesses. Andrew is experienced in creating value for companies in industries ranging from staffing and professional services, retail automotive dealerships, manufacturing and real estate. He also has over 25 years experience assisting individuals and businesses with income tax planning and compliance. Andrew holds a Bachelor of Science degree in Business Administration from Wayne State University in Detroit, MI and a Master of Science in Finance from Walsh College in Troy, MI. His graduate education included significant elective study in Taxation. His services include: Accounting, Tax and Advisory Services. Visit andrewjordancpa.com for more information.
How much tax will I have to pay if I use my IRA early?
ReplyDeleteIt depends on the type of IRA you have. In most cases one can withdraw funds from a Roth IRA tax-free. Traditional IRA withdraws will cost you though. Early withdraws from a traditional IRAs generally will be taxed at your marginal tax rate plus a 10% penalty may apply. There are exceptions to the penalties that one should explore if an early withdrawl is unavoidable. As you can see early withdrawls can be an expensive option and should only be used as a last resort. There's tax planning that one can do to lessen the tax. For example in most cases instead of taking one lump sum distribution take the distributions over 2 or more years to avoid pushing your income up into a higher marginal tax bracket in any one year. Hope this helps.
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