Consider Withdrawing Funds From Your IRA – Penalty Free!

HAVE A QUESTION

Call or email Lewis Weinstein
for your Free Consultation
617-338-2210


TOP MBA TAX STRATEGIES

Consider a Roth IRA Conversion During Your Low Income Years

Consider Amending Your Tax Return to Deduct your MBA as a Work Related Expense

Consider Recognizing Long- Term Capital Gains in Low Income Years

Consider a Backdoor Roth IRA

by Lewis A. Weinstein
Founder and CEO of GenerationTax

When you withdraw funds from your IRA you typically must pay a 10% early distribution penalty. However, if you withdraw funds from your IRA to pay for your MBA tuition, course materials and room & board you will not be subject to the 10% early distribution penalty. You will pay regular taxes on the amount withdrawn, but again you will not be subject to the 10% penalty. In addition, if you are married, your spouse can withdraw funds from their IRA to pay for your education expenses free of the 10% penalty.

It should be noted that you will pay a 10% early distribution penalty if you withdraw funds from your 401(k) regardless if you use the funds to pay for education purposes. However, there is a simple little work around. You can avoid the 10% penalty of your 401(k) if you rollover the funds from your 401K directly into an IRA and then withdraw the funds from your IRA to pay for your qualified education expenses.