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Dave CPA
Dave CPA, Accountant
Category: Tax
Satisfied Customers: 840
Experience:  Vast knowledge within the accounting/tax industry
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Hi, I need to purchase IRAS in order to reduce my Tax Liability.Are

Customer Question

Hi,
I need to purchase IRAS in order to reduce my Tax Liability.Are there any IRAS that could be encashed within one year with no penaly.I dont mind if I dont get any interest but my principle dhould not be subject to penalty
Submitted: 4 years ago.
Category: Tax
Expert:  Dave CPA replied 4 years ago.
Hello,

Unfortunately there isn't one with a few exceptions.

Exceptions: There are several exceptions to the age 59½ rule. Even if individuals receive a distribution before they are age 59½, they may not have to pay the 10% additional tax if they are in one of the following situations.
- They receive a distribution from a retirement plan (other than an IRA) after leaving a job and are age 55 (age 50 for qualified public safety employees).
- They have unreimbursed medical expenses that are more than 7.5% of their adjusted gross income.
- The distributions are not more than the cost of their medical insurance (IRA only).
- They are disabled.
- They are a beneficiary of a deceased plan participant or IRA owner.
- They are receiving distributions in the form of an annuity.
- The distributions are not more than their qualified higher education expenses (IRA only).
- They use the distributions to buy, build or rebuild a first home (IRA only, and limited to $10,000).
- The distribution is due to an IRS levy.
- The distribution is a qualified reservist distribution.
- The distribution is made to an alternate payee under a QDRO.
- They are receiving a distribution timely made to reduce excess contributions under a 401(k) plan.
- They are receiving a distribution timely made to reduce excess employee or matching employer contributions (excess aggregate contributions).
- They are receiving a distribution timely made to reduce excess elective deferrals.
- They are receiving a permissible withdrawal from an EACA

http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics---Tax-on-Early-Distributions