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I inherited an IRA while on SSI, so I am in a low tax

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I inherited an IRA...

I inherited an IRA while on SSI, so I am in a low tax bracket. I have to choose by end of year wether to cash in or leave in IRA. Since I would probably have to cash in as time passes, what is the penalty,tax wise, for taking it early? Would it make more sense to just have stock investments outside of IRA and cash them in as needed. The original IRA is over 10 yrs old.

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

Not that I am aware of.

Submitted: 7 months ago.Category: Tax
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11/16/2017
Tax Professional: Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional replied 7 months ago
Chad EA, CFP ®
Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Tax
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Welcome to JustAnswer! My name is ***** ***** I will be able to assist you today.

With an inherited IRA you are NOT penalized the 10% early distribution penalty if you are under 59 1/2. This is an exception to the early distributions penalty rules because you inherited the IRA.

Q:Would it make more sense to just have stock investments outside of IRA and cash them in as needed.

A: Leaving the investments inside of the IRA and withdrawing funds as they are needed generally makes the most sense. This is because your investments will remain tax deferred until you distribute the funds.

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Tax Professional: Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional replied 7 months ago

I would be happy to answer any follow up questions you may have.

At the conclusion of our conversation please take a moment to accept the answer by rating the answer with three stars or more.

A positive rating of five stars is always appreciated.

Thank you!

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Tax Professional: Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional replied 7 months ago

Do you have any further questions?

If not please take a moment to accept my answer.

Thank you.

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Tax Professional: Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional replied 7 months ago

I would be happy to answer any follow up questions you may have.

___

At the conclusion of our conversation please take a moment to accept the answer by rating the answer with three stars or more.___ A positive rating of five stars is always appreciated. Thank you!
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Tax Professional: Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional replied 7 months ago
I would be happy to answer any follow up questions you may have. At the conclusion of our conversation please take a moment to accept the answer by rating the answer with three stars or more. A positive rating of five stars is always appreciated. Thank you!
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