Tax ?

[deadeyededric]

I am using the HR/block tax program, and am wondering why I am being taxed for a Roth IRA distribution from an account that's over 5 years old? I have a tax appt. tonight but I'm pissed i have to pay to see one. I usually do my taxes myself. It even says on the 1099 that none of it is taxable income. When I withdrew the money the people who I go through said it was tax free

 

[BCClone]

Are you 60?

 

[deadeyededric]

Are you 60?

No but I've had the account for more than 5 years.

 

[BCClone]

No but I've had the account for more than 5 years.

I know you can take principle out for certain purposes, maybe it’s not coded right?

 

[aeroclone]

You can withdraw contributions to a Roth IRA at any time without taxes or fees. But tax free withdrawals of any earnings generated in the Roth require you to be 59.5 and to have had the account for 5 years.

 

[deadeyededric]

You can withdraw contributions to a Roth IRA at any time without taxes or fees. But tax free withdrawals of any earnings generated in the Roth require you to be 59.5 and to have had the account for 5 years.

I've had it for 8 years. My investment people said I wouldn't be taxed on it. When I upload it to HR/block it taxes me on it all. I don't understand why. Like I was saying the 1099 is blank on the taxable income part.

 

[83cy]

Are you 59 1/2? Did you code it/enter it wrong on HR Block?

 

[deadeyededric]

I know you can take principle out for certain purposes, maybe it’s not coded right?

You can regardless of how long you've had it for emergency, home purchase, and a few other things. But as @aeroclone says there should be no penalty if you are either 59 1/2 years old or the account is older than 5 years. I've had it for well over 5 years. I had to get an appointment with a tax person tonight over the confusion.

 

[deadeyededric]

Are you 59 1/2? Did you code it/enter it wrong on HR Block?

No but the account is over 5 years old. I uploaded it so I'm hoping maybe the upload just didn't check a box automatically. It appears that the correct things were "auto checked" but something is definitely off. I can do my taxes when they are basic or even have a few stock sales, but this has me stumped. I hate having to pay to see someone but that's just how it's gonna go this year.

 

[Ankency]

You can regardless of how long you've had it for emergency, home purchase, and a few other things. But as @aeroclone says there should be no penalty if you are either 59 1/2 years old or the account is older than 5 years. I've had it for well over 5 years. I had to get an appointment with a tax person tonight over the confusion.

59.5 AND older than 5 years. Need both

 

[3TrueFans]

At least you didn’t wait until the last minute.

 

[aeroclone]

You can regardless of how long you've had it for emergency, home purchase, and a few other things. But as @aeroclone says there should be no penalty if you are either 59 1/2 years old or the account is older than 5 years. I've had it for well over 5 years. I had to get an appointment with a tax person tonight over the confusion.

So this is going to depend on what you took out. If what you took out was less than or equal to your contributions, then nothing else matters because you didn't touch the earnings. No taxes or fees.

But if you dipped into earnings then it either has to be retirement meaning 59.5 in age AND account open for 5 years. OR one of those special conditions like first time home purchase, death, or disability. If you touched earnings without one of those conditions, you owe taxes and penalties.

 

[deadeyededric]

59.5 AND older than 5 years. Need both

So glad my investment people went ahead and took out taxes for a withdrawal from my traditional yet neglected to take out from my roth

 

[Ankency]

So glad my investment people went ahead and took out taxes for a withdrawal from my traditional yet neglected to take out from my roth

That’s definitely a bummer! Investment people might need to brush up on the Tax Code

 

[cedarstrip]

So glad my investment people went ahead and took out taxes for a withdrawal from my traditional yet neglected to take out from my roth

I'm interested how this works out. Keep us updated.

 

[deadeyededric]

I'm interested how this works out. Keep us updated.

I'm gonna get bent over from the sound of it

 

[Dgilbertson]

I'm gonna get bent over from the sound of it

Definitely keep us posted. Now I’m interested.

 

[cyfanbr]

Assume you already googled this, but below is what I got.

Only way you won’t pay is if you are 59.5 years old AND the account is older than 5 years like other have said. Other way you wouldn’t pay is if it was for a qualified expense. If you investment people messed this up then you may also need a new financial adviser.

 

[isucy86]

I am using the HR/block tax program, and am wondering why I am being taxed for a Roth IRA distribution from an account that's over 5 years old? I have a tax appt. tonight but I'm pissed i have to pay to see one. I usually do my taxes myself. It even says on the 1099 that none of it is taxable income. When I withdrew the money the people who I go through said it was tax free

Even if 1099 box 2 says zero, need to check box 2b. If it's checked, it means the entity isn't necessarily providing accurate info.

I have had experience where entity put $0 and there was taxable amount and opposite where they put entire amount from Box 1 and it should have been $0.

 

[cycloner29]

I'm gonna get bent over from the sound of it

Calling @CoachHines3 mom!