I am considering a IRA contribution for the first time to lower my tax situation. What are the rules or constraints for such a contribution. Example, must I keep the IRA untouched for a predetermined amount of time before I can claim any benefit from the IRA account? How long before I can execute IRA disbursement if i need it?
In reality, you always have access to your funds that are held in the IRA. The question is how much will it cost you?
If you are under 59-1/2 and withdraw money from an IRA, those funds are taxed at your regular income tax rate plus a 10% penalty.
After 59-1/2, a traditional IRA does not carry the penalty, just normal tax.
Be careful, if you or your spouse (if you have one) are covered by a retirement plan from an employer, there are income limits that can make you ineligible for a deduction.
In reality, you always have access to your funds that are held in the IRA. The question is how much will it cost you?
If you are under 59-1/2 and withdraw money from an IRA, those funds are taxed at your regular income tax rate plus a 10% penalty.
After 59-1/2, a traditional IRA does not carry the penalty, just normal tax.
Be careful, if you or your spouse (if you have one) are covered by a retirement plan from an employer, there are income limits that can make you ineligible for a deduction.
Thank you, I am finding now that because i'm covered by a retirement plan from an employer, and with income limits we ineligible for a deduction. Leads me to the decision of filing separate and not joint married. Either way I am over the limit but my spouse on her own is not. Is this a viable option to file separately and claim the IRA contribution for only her?