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Bill
Bill, Enrolled Agent
Category: Tax
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Experience:  EA, CEBS - 35 years experience providing financial advice
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Can funds deposited in a ROTH IRA account be withdrawn at anytime?

Resolved Question:

Can funds deposited in a ROTH IRA account be withdrawn at anytime? if they are withdrawn what is the tax rate applicable and is there a fine as well on top?
Submitted: 4 years ago.
Category: Tax
Expert:  Bill replied 4 years ago.

Yes, funds deposited in a Roth IRA can be withdrawn at any time. If the funds deposited represent Roth IRA contributions then those amounts can be withdrawn tax-free and penalty free. If an amount in excess of the contributions is withdrawn then that amount would be subject to income taxes if it is not a qualified distribution (and a 10% penalty if before age 59 1/2.

 

Conversion amounts can also be withdrawn tax-free. However, if conversion amounts are withdrawn prior to 5 years and before age 59 1/2 then there is a 10% penalty.

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