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Because fed and state tax, If I withdraw 200 grand to settle

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bankruptcy trustee, do I face...
Because fed and state tax, If I withdraw 200 grand to settle bankruptcy trustee, do I face anther tax problem ? Is there penalty for withdrawing from Ira?
Submitted: 2 years ago.Category: Tax
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Answered in 11 minutes by:
10/26/2015
Tax Professional: emc011075, Tax adviser replied 2 years ago
emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 3,331
Experience: IRS licensed Enrolled Agent and tax instructor
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Hi. My name is ***** ***** I will be happy to help you.

If you are younger than 59 1/2 you will have to pay income tax + 10% penalty for early distribution. There are some exceptions to the penalty, but not the income tax.

Please, do not shoot the messenger, unfortunately, bankruptcy or paying income tax is not one of the exceptions. The only exception in your case would apply if IRS levy your IRA account. But have a look at the table, you may find another exception that would qualify.

https://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics---Tax-on-Early-Distributions

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Tax Professional: emc011075, Tax adviser replied 2 years ago

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?

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