AboutCarole Dunton Expertise Preparation of individual income tax returns including social security, pensions, lump sum distributions, sale of personal residence, stock and mutual fund sales, distributions from individual retirement accounts, moving expenses and itemized deductions.
General knowledge of schedule C for small sole proprietorships.
No experience in corporate, estate, partnership or large business returns.
Experience 8 years as tax preparer for major national firm.
Expert: Carole Dunton Date: 7/7/2008 Subject: IRA DISTRIBUTION
Question Carole, I'm retired and have an IRA. I want to go into a business and use some of my IRA money to start the business. I as told there may be a way to use my IRA money and not pay tax on it, NOW, if I start a business. Is this true?
IF so how can i get started.
Thank You
Anthony
Answer Hi,
Any money you take out of your IRA will be subject to income tax and, if you are under 59 1/2, a 10% penalty for early withdrawal. You can use the money to start a business but there is no way to avoid income tax or the penalty.
If your business has a loss the first year and you are a sole proprietor, the loss could be used to offset other income for income tax purposes.
