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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28081
Experience:  Taxes, Immigration, Labor Relations
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I am 64 years old and am semi retired to start an in home business

Customer Question

I am 64 years old and am semi retired to start an in home business teaching real estate classes for new agents. If I borrow money from my Sep Ira and pay it back the same year- will I be penalized?
Submitted: 6 months ago.
Category: Tax
Expert:  Lev replied 6 months ago.
You may not borrow the money from SEP IRA...We are only allowed to rollover funds - and if cash is taken the money must be put back within 60 days to classify as rollover.Otherwise - that will be considered as distribution and a new contribution.There is no penalty based on your age - but you might have taxable income.Let me know if you need estimations.
Customer: replied 6 months ago.
Hi Lev-
So if I take 30,000 out I will be taxed (I am not taking social security now. Just want some start money to give back to the community. What is the limit I can pay back? (all of it or only the yearly allowable?)
Expert:  Lev replied 6 months ago.
Yes - if you take $30k distribution - that will be reported as taxable distribution on form 1099R and will be added to your other taxable income.
Expert:  Lev replied 6 months ago.
The limit to rollover and not to be treated as taxable income is not more than 60 days between taking the money out and putting them back.Only one time per year.Please be aware that if you put the money back after 60 days - that is treated as new contribution - so be sure you qualify and that is not over contribution..I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you will all tax related issues.