Home Improvements

joyapk01 — Wed, 30 Oct 2024 18:14:22 GMT

We have a simple IRA that we want to take money out of to pay for a new roof. How do we record this on our taxes?

Re: Home Improvements

John-H2021 — Wed, 30 Oct 2024 18:27:30 GMT

Hello,

Generally, you must pay income tax on any amount you withdraw from your SIMPLE IRA. You may also have to pay an additional tax of 10% or 25% on the amount you withdraw unless you are at least age 59½ or you qualify for another exception.

Additional taxes

10% tax
You have to pay a 10% additional tax on the taxable amount you withdraw from your SIMPLE IRA if you are under age 59½ when you withdraw the money unless you qualify for another exception to this tax. In some cases, this tax is increased to 25%.
25% tax
The amount of the additional tax you must pay increases from 10% to 25% if you make the withdrawal within 2 years from when you first participated in your employer's SIMPLE IRA plan.

Exceptions to additional taxes

You don’t have to pay additional taxes if you are age 59½ or older when you withdraw the money from your SIMPLE IRA. You also don’t have to pay additional taxes if, for example:

Your withdrawal is not more than:

Your unreimbursed medical expenses that exceed 10% of your adjusted gross income (7.5% if your spouse is age 65 or older),
Your cost for your medical insurance while unemployed,
Your qualified higher education expenses, or
The amount to buy, build or rebuild a first home

Your withdrawal is in the form of an annuity
Your withdrawal is a qualified reservist distribution
You are disabled
You are the beneficiary of a deceased SIMPLE IRA owner
The withdrawal is the result of an IRS levy

Here's where to enter your 1099-R in TurboTax:

Open or continue your return.
In the Federal section, select Wages & Income.
Scroll to locate Retirement Plans and Social Security.
Select Start or Revisit next to IRA, 401(k), Pension Plan Withdrawals (1099-R).

You can also find the 1099-R section using Search. Open or continue your return in TurboTax by selecting the Continue or Start button on the Tax Home screen, enter 1099-r in the search bar, and select the Jump to 1099-r link.

topic Home Improvements in Get your taxes done using TurboTax

Home Improvements

Re: Home Improvements