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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28081
Experience:  Taxes, Immigration, Labor Relations
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I withdrew 9000 dollars from my IRA in 2014 to cover living

Customer Question

I withdrew 9000 dollars from my IRA in 2014 to cover living expenses due to spousal support and child support. I was stationed in Hawaii at the time where the cost of living is very high. Is there any way to avoid the tax penalty for early withdrawal?
Submitted: 6 months ago.
Category: Tax
Expert:  Lev replied 6 months ago.
To discourage the use of IRAs for purposes other than retirement, the law imposes an additional 10% tax on early distributions from Roth IRAs unless an exception applies. Generally, early distributions are those you receive from an IRA before reaching age 59 1/2.There are exceptions to this additional 10% tax for early distributions that are:Made to a beneficiary or estate on account of the IRA owner's deathMade on account of disabilityMade as part of a series of substantially equal periodic payments for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiaryQualified first-time homebuyer distributionsNot in excess of your qualified higher education expensesNot in excess of certain medical insurance premiums paid while unemployedNot in excess of your unreimbursed medical expenses that are more than a certain percentage of your adjusted gross incomeDue to an IRS levy, orA qualified reservist distributionWhile distribution reasons you mentions - living expenses, spousal support and child support - may not be used as an exceptions - I still suggest to verify if any listed above may be used in your circumstances.Otherwise - you would not have any choice.
Customer: replied 6 months ago.
If I don't meet any of the requirements above, am I stuck paying the tax regardless of my financial situation at the time?
Expert:  Lev replied 6 months ago.
Unfortunately - we may not claim an exemption from the penalty based on financial situation.Only these qualified conditions as set in statute may be used to claim an exemption.Sorry if you expected differently.

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