Posted on: 20th Aug, 2011 08:51 am
I bought my first house one year ago thru FHA loan.
Is it possible to take some money out of my IRA and pay
towards the loan repayment without paying taxes for that money?
Is it possible to take some money out of my IRA and pay
towards the loan repayment without paying taxes for that money?
That depends on your age, Pat. If you are not of retirement age, i.e. 59 or above, then you'll be paying taxes on any money you take out. There is no "mortgage" benefit when you take a distribution from an IRA.
There are only a few ways you can take out your Roth IRA with out penalty
If you take Roth IRA withdrawals that do not represent your original contributions, or are not “qualified†distributions as defined earlier, then you may be subject to a 10% penalty (the IRS calls this additional tax). Thankfully, there are several exceptions to the 10% early withdrawal penalty.
Following are several situations in which the 10% early withdrawal penalty may not apply:
You are age 59 ½ or older,
You are disabled,
The withdrawal is from an inherited IRA,
You qualify as a first time home buyer (distributions of up to $10,000 can be taken penalty free to be used towards the purchase of your first home),
The distributions are part of a series of substantially equal payments (i.e., these payments must generally last for 5 years or until you reach age 59 ½, whichever is longer),
You are using the withdrawal to pay for significant unreimbursed medical expenses,
You are paying medical insurance premiums after losing a job, or
The distribution is being used to pay for qualified higher education expenses.
I don't know if any of these apply to you, but I hope you can pay your home off soon. Good luck and hope this helped. :)
If you take Roth IRA withdrawals that do not represent your original contributions, or are not “qualified†distributions as defined earlier, then you may be subject to a 10% penalty (the IRS calls this additional tax). Thankfully, there are several exceptions to the 10% early withdrawal penalty.
Following are several situations in which the 10% early withdrawal penalty may not apply:
You are age 59 ½ or older,
You are disabled,
The withdrawal is from an inherited IRA,
You qualify as a first time home buyer (distributions of up to $10,000 can be taken penalty free to be used towards the purchase of your first home),
The distributions are part of a series of substantially equal payments (i.e., these payments must generally last for 5 years or until you reach age 59 ½, whichever is longer),
You are using the withdrawal to pay for significant unreimbursed medical expenses,
You are paying medical insurance premiums after losing a job, or
The distribution is being used to pay for qualified higher education expenses.
I don't know if any of these apply to you, but I hope you can pay your home off soon. Good luck and hope this helped. :)
And I goofed up there...should have noted the penalty for early withdrawals, which is dependent on age, as NoeNoe so artfully pointed out.