Finance

Have finance questions? Ask a financial expert online.

Ask an Expert,
Get an Answer ASAP!

what are the tax consequences if I take out money from my IRA…

Customer Question
what are the tax consequences...
what are the tax consequences if I take out money from my IRA to pay for my delinquent mortgage payments to avoid forclosure?
Submitted: 8 years ago.Category: Finance
Show More
Show Less
Ask Your Own Finance Question
Answered in 3 hours by:
6/20/2010
Financial Professional: Taxtom, Accountant replied 8 years ago
Taxtom
Taxtom, Accountant
Category: Finance
Satisfied Customers: 2,364
Experience: 25 Years in preparing Personal and Business Tax Retuns
Verified

Hello, If you are under the age of 59 1/2 you would pay a penalty of 10% and state and federal taxes. It usually adds up to between 30 and 40 percent with penalty. I usually don't advise taking money out of a retirement account but if this a temporary problem and once you get caught up you can maintain the payments that is would be a good decision. Take out only whats absolutely necessary. Keep in mind they will usually withhold federal taxes in the amount of 10 to 20 percent so be sure to ask before you withdraw so you will have enough to cover your mortgage. Also have you made any attempt to have your mortgage modified with your changes in circumstances or the change in the value of your home. Here is a link to the Making Home Affordable website http://www.makinghomeaffordable.gov/ and here is a link to the IRS's website which will explain early withdrawal cost more http://www.irs.gov/newsroom/article/0,,id=201870,00.html . Thank You Tom Please click accept.

 

Ask Your Own Finance Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a financial professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Taxtom Your Own Question
Taxtom
Taxtom
Taxtom, Accountant
Category: Finance
Satisfied Customers: 2,364
2,364 Satisfied Customers
Experience: 25 Years in preparing Personal and Business Tax Retuns

Taxtom is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Rakhi Vasavada

Rakhi Vasavada

Financial and Legal Consultant

2,609 satisfied customers

Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years

Megan C

Megan C

Certified Public Accountant (CPA)

2,222 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

Manal Elkhoshkhany

Manal Elkhoshkhany

Tutor

1,933 satisfied customers

More than 5000 online tutoring sessions.

JKCPA

JKCPA

CPA

844 satisfied customers

Bachelors degree and CPA with Accounting experience.

Eric

Eric

Financial Manager

559 satisfied customers

Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.

R. Klein, EA

R. Klein, EA

Accountant

480 satisfied customers

TurboTax Expert. QuickBooks Certified Pro Advisor

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

332 satisfied customers

NASD Licensed Rep, 1997-2001, Business Attorney

< Previous | Next >

Related Finance Questions
Evening. About to receive an inheritance from grandma. I can
Evening. About to receive an inheritance from grandma. I can now afford to buy a home. Not sure the best way, taxationwise, to go about purchasing a home with inheritance: financing v purchasing outri… read more
abci168
abci168
Principal
27 satisfied customers
This question is on pulling money from an Ameriprise 401K
This question is on pulling money from an Ameriprise 401K and moving it to a Fidelity account where I hold a 403B.I am selling my house. Fingers crossed that everything will go through with my contrac… read more
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,610 satisfied customers
I just quit my job after 15 years to stay home with our 3
I just quit my job after 15 years to stay home with our 3 kids. We need to increase our monthly spending money. We are currently on a 15 year mortgage 5.125 interest rate and we have 13 years left. We… read more
TaxAttorneytoHelp
TaxAttorneytoHelp
Owner
Doctoral Degree
2,542 satisfied customers
I have a question about a baloon mortgage. The terms of the
I have a question about a baloon mortgage. The terms of the mortgage are $57200 at 6.35% interest. Start date was 10-1-2005 Due date is 9-1-2020. Payments are $355.92. I have just paid the normal paym… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Hello, I am not sure if this question is directed to the
Hello, I am not sure if this question is directed to the proper category but if not, please point me in a direction..........thanks. I have ~ $170K combined in an IRA and 401K at my workplace. I owe ~… read more
DanielleCPA
DanielleCPA
Certified Public Accountant
Bachelor's Degree
76 satisfied customers
When your recently unemployed and you have money invested in
When your recently unemployed and you have money invested in your 401K what options do you have.… read more
Taxtom
Taxtom
Accountant
Bachelor's Degree
2,364 satisfied customers
my house may be foreclosed upon. I am unable to pay the payments.
my house may be foreclosed upon. I am unable to pay the payments. I wanted to know of any penalties I may face if this is done.… read more
Dave Z
Dave Z
Self-Employed
Bachelor
418 satisfied customers
Hello. I have been unemployed for more than a year now and
Hello. I have been unemployed for more than a year now and I don't anticipate that I'll be working much this year either. I have an opportunity to take $120,000 from my 401k.I understand that I'll hav… read more
Gerri A Harrison CFP EA
Gerri A Harrison CFP EA
Financial advisor/Tax preparer
Bachelor's Degree
86 satisfied customers
Im in the process of rolling over my traditional $30,000.
I'm in the process of rolling over my traditional $30,000. IRA, and I'm wondering if I should change it into a Roth IRA. Other than the equity I have in my condo, this is the only investment I have. I… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Im unemployed and my husband is a realtor. Last year he had
I'm unemployed and my husband is a realtor. Last year he had a good year, but so far this year has not been good. We've had to use money set aside for taxes for living expenses. We will owe about 19,0… read more
Dennis M. Smith
Dennis M. Smith
Retired
Bachelor Degree
1,293 satisfied customers
My husband and I are considering defaulting on a mortage on
My husband and I are considering defaulting on a mortage on a rental property. We have pmi on the mortgage. What happens to us it the house is repossessed.… read more
Ed Johnson
Ed Johnson
Senior HR Consultant and Business Devlpm
Bachelor's Degree
6,994 satisfied customers
i have just received my divorce after 28 years of marriage ...
i have just received my divorce after 28 years of marriage in Tenn. i am waiting on the quadro to be completed. The 401k is from my husbands company that he was recently fired from after 26 years with… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
Im 45. I have $50,000 in retirement IRA/SEP acct. I
I''m 45. I have $50,000 in retirement IRA/SEP acct. I have$15,000 in a Roth IRA. My mortgage is $1200/month and will be paid in full in approx. 4 years b/c I currently pay $1000 extra/month. Unfortuna… read more
Ed Johnson
Ed Johnson
Senior HR Consultant and Business Devlpm
Bachelor's Degree
6,994 satisfied customers
How do I protect myself in buying a second home if I cannot ...
How do I protect myself in buying a second home if I cannot rent or sell my primary residence and have taken a chunk of the money out?… read more
Ed Johnson
Ed Johnson
Senior HR Consultant and Business Devlpm
Bachelor's Degree
6,994 satisfied customers
I have just gone through a divorce and received my
I have just gone through a divorce and received my home in the settlement. My home is worth 600,000 plus with a remaining mortgage of less than 100,000. Because I was a stay at home mom for 18 years a… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
We are retired. We have an IRA with Merrill Lynch. I want ...
We are retired. We have an IRA with Merrill Lynch. I want to pull out $100,00 to invest in the stock market on my own. Is there some way to do this withou having to pay all those tax liabilities? LuAn… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
We are about to go delinquent on our mortgage. What ...
We are about to go delinquent on our mortgage. What are the legal reprecussions of going into forclosure? We would like to just give the house up back to the lender.… read more
Dave Z
Dave Z
Self-Employed
Bachelor
418 satisfied customers
Just filed chapter 7 and have the opportunity to buy back ...
Just filed chapter 7 and have the opportunity to buy back the equity in my house from the trustee. I'll be withdrawing from my 401K. How can I minimize penalties and taxes for early withdrawl. I'm 50 … read more
Dave Z
Dave Z
Self-Employed
Bachelor
418 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x