Hi, as long as you reinvested into another traditional IRA within the 60 day time frame, it will count as a rollover and there's no penalty and no tax
Here's a chart that shows ALL of the retirement accounts that can be rolled over (one account to another) ... If you'll note: the traditional IRA on the "Roll From" side of the chart is "rollable" to a traditional IRA on the "Roll To" side of the chart with no restrictions
The IRS says "If the distribution from the qualified plan or IRA is paid to you, you have 60 days from the date of receipt to roll it over to another qualified plan or IRA." See this: http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics---Rollovers-of-Retirement-Plan-Distributions
So, no tax consequences there
ON the Roth, you can always withdraw the principal (contributions mad from already taxed dollars) with no tax ramafications
And finally, the traditional and IRA issues here aren't related at all
Hope this helps
I still don't see you coming into the chat session, so I'll move us to the "Q&A" mode. … Maybe that will help … (We can still continue a dialogue there, just not in real-time chat, as we can here)
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If someone is not able to work due to a disability and they withdraw money from a ROTH IRA that goes beyond the amount of their contributions, and they have a note from their doctor regarding their inability to work, what are the tax consequences?
Are you saying the same exceptions that apply to a traditional IRA would apply to a ROTH IRA? If there was a qualifying letter regarding disability from the doctor and someone withdraws beyond the contribution amount from a ROTH IRA, what is the tax consequence to the amount withdrawn that was not contributions. At this point I have zero earned income this year, although there would be a little income from a traditional IRA, although I had taxes withheld just in case, even though the doctor had provided a letter after I called the IRA and had them explain the law.
Your answer did help. I have a related question though. How many letters in one year does someone need for the IRS to show someone needs the money due to a long indefinite period of being unable to earn a substantial and gainful living for health reasons? I am not sure I will be able to earn any pay this year, but that remains to be seen. For easy math though, assuming I had zero taxable income this year, would that mean all medical expenses paid by my IRA money would avoid the tax penalty?
Are you saying if I had a letter in May, I do not need to get another letter for this year if an IRA withdrawal was made after May?