Q. Can I withdraw from my IRA to pay a $3,000 dental bill penalty (and tax) free? My adjusted gross income is 0.
A. Simple answer: yes.
Medical expenses is an exception to the 10% penalty, but not the tax. The distribution, itself, would normally be taxable. But the fact that your AGI is 0 means that the income ($3000) is not enough to result in taxable income, after applying the standard dedution. Note: if you are somebody else's dependent, you don't get the full $12,400 standard deduction. If you are a dependent, that small amount could be subject to tax.
@Critter-3 's comment that "you can take out the contributions at any time tax free" only applies to Roth IRAs, not traditional IRAs.
