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Am I still exempt from the 10% tax penality for taking a distribution

from my IRA as a...
Am I still exempt from the 10% tax penality for taking a distribution from my IRA as a hardship due to college expenses for my son (his college and student status qualify), if I have already actually paid the tuition before I take the withdrawal from the IRA but it is in the same tax year (2012)? I live in MA.
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Answered in 4 minutes by:
10/1/2012
Dmastcpa
Dmastcpa, Accountant
Category: Tax
Satisfied Customers: 21
Experience: Certified Public Accountant
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Dmastcpa :

Hello and welcome to Just Answer


 

Dmastcpa :

Just to clarify, you paid your sons tuition and then pulled money from the IRA to cover the cost?

Customer:

I have paid my son's tuition and still am, but have not yet taken the money from my IRA.

Dmastcpa :

Early distributions are allowed for the exemption of of the 10 percent penalty for tuition for education in college. As long as you withdraw the money within the same tax year you can claim the exemption

Customer:

Just to be clear, even though I've made payments since Jan. 2012 and will continue through Dec. 2012, I can withdraw an equal amount from my IRA and be exempt from the 10% penalty?

Dmastcpa :

You do not have to withdraw the money and turn around and send it right back in to get the exemption, as long as the tuition payment and the early withdraw are in the same year

Customer:

Ok, thank you. And just for my own peace of mind, is there somewhere I can see your credentials on this site?

Dmastcpa :

Should be listed and you should be able to see it now, however I am a CPA

Customer:

ok, thank you again.

Dmastcpa :

If I answered your question today please remember to rate me answer so that I may receive credit. thanks

Customer:

I will do that right now. Thanks so much

Dmastcpa :

Have a blessed day

Dmastcpa
Dmastcpa, Accountant
Category: Tax
Satisfied Customers: 21
Experience: Certified Public Accountant
Verified
Dmastcpa and 87 other Tax Specialists are ready to help you
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Hello,

Thank you for letting me answer your question. One thing I wanted to add was that the exemption is limited to the tuition paid. in other words if you withdrawal 5k and only paid 3k in tuition costs for your son then the exemption is only on the 3k.

Have a great day
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Dmastcpa
Dmastcpa
Dmastcpa, Accountant
Category: Tax
Satisfied Customers: 21
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