Retirement tax questions


@cspyon1 wrote:

By the way, back to my topic, does ROTH IRA money counts as your income when withdrawn?

I guess not, but want to double check. 


If you only withdraw contributions, it's not taxable income and is not "income" on your tax return.  You will get a 1099-R form that you have to report on your return but it does not go as income.

 

If you withdraw MORE than you originally contributed (your gains or earnings) that is:

1. Taxable income if you are under age 59-1/2 or the Roth IRA was open less than 5 years.

2. Not taxable income if you are over age 59-1/2 AND the Roth IRA is at least 5 years old.

 

For example, I started a Roth IRA last year and so far I have contributed $12,000.  The account is currently worth $13,000.  If I withdraw $12,000 or less, it is not taxable income and not income on my tax return.  If I withdrew the entire amount, then $1,000 would be taxable income because I am not age 59-1/2 and the account is less than 5 years old.