You are here:

Tax Law (Questions About Taxes)/early withrawal from roth IRA

Advertisement


Question
In 2011, 2012, and 2013 my wife and I deposited $27K into two Roth IRA accounts. - We got married in 2012 and filed taxes jointly for 2012 and 2013. - We removed all of the Roth IRA money (which had grown to $30k) for a first time home purchase in 2014. - Because the money was in the account for less than 5 years, the interest ($3k) does not fall under the special first time home-buyers exception and is subject to a 10% penalty/tax ($300). - However, I am unclear how to file taxes for this because... - There are two accounts, each with 11 different funds, and money was added to each fund at three different times. So, it's not a simple one buy one sell situation. How do I file this and can my usual online TaxAct handle it or do I need something else?

Answer
Jordan,

Thanks for your question.

After the end of the year, you will get some 1099-R forms from the trustee for your IRA accounts. Simply input the information from those forms and it should handle everything correctly.  You may have to manually make an adjustment for the amount of the penalty, it depends on how the 1099-R forms are completed.

I do not use TaxACT online, so I can't tell you if it will handle this situation or not.  Most likely, it will.

Hope this helps.

John Stancil, CPA  

Tax Law (Questions About Taxes)

All Answers


Answers by Expert:


Ask Experts

Volunteer


John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

©2016 About.com. All rights reserved.