Can I withdrawl funds early from my Roth IRA without fees and taxes if funding a first time home purchase? If so how much?

[DanO · Accepted solution]

Yes, if you meet these following conditions as a first-time home buyer:

• The account has been open for five years.
• You withdraw $10,000 or less to purchase a home.
• The funds are used directly toward a home acquisition (down payment, closing costs, etc.)

If the above criteria are met, you can withdraw your entire account up to $10,000.  The $10,000 is a lifetime limit, and if the rules are met, the withdrawal will count as a qualified distribution and there will be no income tax owed or early withdrawal fees.

[twright186]

What about contributions. Can those be taken tax/fee free?

[DanO]

Contributions can be taken tax and penalty free, but earnings would incur tax and penalties.

[robandchris01]

Everything I found online is that this is $20,000 for couples, but that does not seem to be an option in turbo tax.

What can I do?

[DoninGA]

Only $10,000 from your IRA and $10,000 from your spouse's IRA can be used penalty free for a first time home purchase.  Not $20,000 from one IRA if you are married.

[robandchris01]

Ah - I clearly misunderstood this, thank you for clarifying and for your quick reply!