topic IRA/401K Withdrawal in Retirement tax questions

IRA/401K Withdrawal

0816 — Fri, 20 Mar 2020 00:20:16 GMT

I withdrew money from my IRA in 2019. I did not have taxes taken since I didn't know what my tax liability was going to be. I am 62 years old. Was there a penalty because I took the monies at 62 years old?

Re: IRA/401K Withdrawal

DavidD66 — Fri, 20 Mar 2020 00:36:15 GMT

There is no penalty for taking a distribution from an IRA if you are age 59 1/2 or older. The distribution may be subject to ordinary income tax, but it will not be assessed the 10% penalty for early withdrawal.

Re: IRA/401K Withdrawal

0816 — Fri, 20 Mar 2020 01:03:58 GMT

You noted that the distribution may be subject to ordinary income tax. Why would it not be subject to ordinary income tax?

Thank you

Re: IRA/401K Withdrawal

MinhT1 — Fri, 20 Mar 2020 01:15:50 GMT

Your distribution would not be taxable up to the amount of basis you have in your IRA. Basis in an IRA is the non-deductible contributions you made.

Please read this TurboTax article about Traditional IRA basis.