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RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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I have an IRA worth $7,786.03 (Ill be 71 in July) what will

Resolved Question:

I have an IRA worth $7,786.03 (I'll be 71 in July) what will the penalty be to cash this in due to my age
Submitted: 7 years ago.
Category: Tax
Expert:  RD replied 7 years ago.
Do you mean the tax liability on cashing in the IRA?
What is your other income besides this IRA withdrawal?
Customer: replied 7 years ago.
our adjusted gross income for 2009 was $23,749.82
Expert:  RD replied 7 years ago.
When you cash out the IRA, the distribution amount will be added to income presuming you have a regular IRA.

There is no penalty involved with this distribution since you are over 59 1/2 years old.
Normally, an account owner must take the first RMD for the year in which he or she turns 70 ½. However, the first RMD payment can be delayed until April 1st of the year following the year in which he or she turns 70 ½.
If an account owner fails to withdraw a RMD, fails to withdraw the full amount of the RMD, or fails to withdraw the RMD by the applicable deadline, the amount not withdrawn is taxed at 50%.
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