topic Ira withdrawal for first time homebuyer in Other financial discussions

Ira withdrawal for first time homebuyer

jabrownin — Mon, 28 Sep 2020 22:55:25 GMT

I'm doing a withdrawal as a first time homebuyer and I am under the impression that I will not be charged penalties and fees since it's being used towards a home. However my account is suggesting a 10% tax withholding. If I choose to do this and I'm not going to get taxed, do I get it back in my end of year refund?

Re: Ira withdrawal for first time homebuyer

DoninGA — Mon, 28 Sep 2020 23:20:17 GMT

For a first time homebuyer you can withdraw from an IRA up to $10,000 and not incur a 10% early distribution penalty. However, the amount withdrawn is still taxable income to be reported on your tax return.

The recommendation for tax withholding is good advice.

Re: Ira withdrawal for first time homebuyer

jabrownin — Mon, 28 Sep 2020 23:32:07 GMT

Thank you! And I will be taxed at my regular income level, correct?

Re: Ira withdrawal for first time homebuyer

DoninGA — Tue, 29 Sep 2020 00:51:04 GMT

@jabrownin wrote:

Thank you! And I will be taxed at my regular income level, correct?

Correct

Re: Ira withdrawal for first time homebuyer

VolvoGirl — Tue, 29 Sep 2020 00:59:44 GMT

But be careful the withdrawal is added to all your income and might push you into a higher tax bracket.