Withdraws from IRA and Roth accounts

[kassondravk]

I withdrew $10,000 from a traditional IRA toward the purchase of a new home in 2018. I claimed that $10,000 on my taxes as going toward the home purchase, so that was allocated correctly. However, I also took a second withdraw from a Roth IRA for the same amount and same reason. Can both $10,000 withdraws be claimed as deductions or non-taxable reason for withdraw on my 2018 taxes?

[Ashby · Accepted solution]

The $10,000 limit is for all IRAs you have. However, if you have $10,000 of contributions in your Roth IRA, that will not be taxed at all. Your after tax contributions to a Roth are never taxable. You are only taxed on the earnings.

Also, if you are married and your spouse has an IRA, they can withdraw $10,000 without the penalty as well.

[kassondravk]

Hi - Thank you very much for answering my question. I sincerely appreciate the help. I am using TurboTax Deluxe software for desktop and in the section, 'IRA, 401k Withdrawals' of my return it states, "Based on the code in box 7 of this 1099-R, you're paying extra tax on this money." This is in regards to the early Roth distribution.

Is my next step to note contribution amounts to my Roth in Form 5329? Will noting contributions to the Roth prevent me from paying extra taxes on this withdrawal?