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monassar
Level 1
June 22, 2020
Question

I haven't worked all year 2019. I liquidated my IRA retirement account for income. How does that effect my tax filing status? What kind of breaks do I get, if any?

  • June 22, 2020
  • 2 replies
  • 12 views
No income form work in 2019;
Cashed out retirement account for income;
Any tax breaks?

2 replies

Employee Tax Expert
AnnetteB6Employee Tax Expert
Employee Tax Expert
June 23, 2020

There are no specific tax breaks available for not having income from work and only receiving a distribution from your IRA.  The nature of your income is just different on your tax return. 

 

When you enter your Form 1099-R that reports the distribution from your IRA, the information reported on that form and the answers to the follow-up questions will determine how much of the distribution will be taxable.  Then, the taxable amount is treated like any other type of income with regard to calculating the income tax.  

 

 

@monassar

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fanfare
fanfare
Level 15
June 23, 2020

you don't get tax breaks.

you get tax penalties for cashing out your IRA before age 59 1/2.

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