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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15720
Experience:  15years with H & R Block. Divisional leader, Instructor
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I am currently unemployed and retired. I have 70,000.00 in

Customer Question

I am currently unemployed and retired. I have 70,000.00 in credit card and HECL debt. I have an IRA for $125,000.00, and would like to withdraw the $70,000.00 to get out of debt while waiting on my disability to go through. can I do this without then going in debt to the government on taxes?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.


If the IRA is a Traditional IRA, you will be taxed on the amount that comes out. There is no special rate of tax, the distribution will be taxed at regular rate of tax.

At single, standard deduction, no dependents, the tax would be estimated at $10,718

You can have the taxes withheld or pay when you file your return.

You are required to rate in a positive way (STARS or SMILEY FACES) if I am to be credited with responding.

Expert:  Robin D. replied 1 year ago.

You responded in a new post.

The pension was not taxed when you made contributions. The rollover was not taxed.

There is no penalty but the tax will apply on the distribution. That is why these are called deferred accounts.

The tax is deferred until distribution.

If teh interest on the debts are less than the tax you will pay it is not a bad idea.

Expert:  Robin D. replied 1 year ago.

Please let me know below if you need clarification. If you do not then a positive rating is appreciated so I get credit for the response.

Expert:  Robin D. replied 1 year ago.

Sorry, went to close page and opted out by mistake