Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

At age 74, how to get cash from my IRA - "The Hartford"

At age 74, how to...
At age 74, how to get cash from my IRA - "The Hartford" variable rate annuity worth $581,000 ?
Show More
Show Less
Ask Your Own Tax Question
Customer reply replied 28 days ago
No mortgage, no auto loans, over 1.2 million in stocks, and cash flow from rental houses in WashDC suburbs. Wish to remodel my home and purchase non-vital stuff in next few weeks. Want at least $175,000 right away.
Have NOT ever made any withdrawals from this TRADITIONAL IRA originally valued at $203,000 in 1998
Customer reply replied 28 days ago
Will the company, The Hartford, wihhold anything for taxes ? or just wait til next year to let IRS take 33% ?
Answered in 12 minutes by:
1/22/2018
Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 738
Experience: Former IRS Revenue Agent
Verified

Dear Customer,

1) If it is an IRA account, you should have started to withdraw the required minimum distribution the year after when you turned 70.5 and the years afterwards. It is possible that you have withdrawn your minimum distribution from all resources total and not from every single one.

2) No matter what we discuss here, would you please make sure you retain a local CPA to discuss further before you withdraw. The size of the annuity is too large for you to trust a communication with me here. There are many factors involved especially in an annuity.

3) It is advised that you withdraw required minimum distribution from this account.

4) Get the 175,000 from your stock investment if you don't have enough in other savings or checking accounts or CDs. Long term capital gain has the lowest tax rate.

5) Don't let the IRS to take any -- or at least the least possible.

6) Please find out and verify whether this annuity account is traditional IRA account or not. If it is, you should have counted your minimum distribution years ago. Then, please make sure that the required minimum distributions have been taken out correctly through out the years past and in the years to come.

Please feel free to follow up.

Regards,

Fiona

Ask Your Own Tax Question
Customer reply replied 28 days ago
This is NOT Roth, but a traditional IRA. Zero withdrawals so far.
OK ( groan...) I will seek out a CPA.
Does the financial institution ( The Hartford, Lexington, KY ) actually do any withholding ? or does the
IRS expect me to report next year and then I'm subjected to at least 33% tax on all distributions ( plus any penalties for being "late") ?

Dear Customer,

The required minimum distribution is taxed at regular tax rate. Therefore, if your regular highest tax rate is 33%, withdrawing from this regular IRA account will be taxed at that rate.

Therefore, it is more tax beneficial to use the investment account money in addition to the required minimum distribution to make up the need of 175,000. The Hartford will and should withhold income tax on this distribution from the annuity.

If you have any penalty for not withdrawing from the regular IRA account, you may want to take the following steps.

1) To calculate your withdrawal from all your retirement account (not pension but IRAs) back to the year after you turned 70.5. We want to make sure that you had short, i.e., insufficient required minimum distribution.

2) To handle the insufficient required minimum distribution, first, you work with Hartford to withdraw and make up the difference as soon as possible now in 2018.

3) Then, when you prepare your 2017 tax return, you use Form 5329 to request for penalty abatement using Part IX. I have used this part to file penalty abatement for each year past using Form 1040X attaching this form. Do not fill out the penalty. Use the Form to request penalty abatement. Your return perparaer should know how to do it. Try not to file this form by itself. File it with each year's tax return.

In a way, it is not penalty abatement, it is to request the IRS not to assert tax. You want to say your reasonable cause which could be your financial institution never reminded you, health reason, etc.

4) It is suggested that you do not volunteer to pay that 50% excise tax.

The IRS usually is willing not to respond. That is, without responding to this return or they inform us the amended return is accepted without any tax adjustment. That means they already agree to not to penalize us. Usually, they will consider especially once we realize the short withdrawal, we already immediately withdrew, they will forgive the penalty.

Please feel free to follow up.

Regards,

Fiona

Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 738
Experience: Former IRS Revenue Agent
Verified
Dr. Fiona Chen and 87 other Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 28 days ago
Thank you very much.
I have rated you 5 stars and added a bonus.

Dear Customer,

You are welcome and you are so kind.

Thank you.

Regards,

Fiona

Ask Your Own Tax Question
Ask Dr. Fiona Chen Your Own Question
Dr. Fiona Chen
Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 738
738 Satisfied Customers
Experience: Former IRS Revenue Agent

Dr. Fiona Chen is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,312 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,362 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

14,120 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,652 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
Does the additional tax of 10% on early distributions (Form
Does the additional tax of 10% on early distributions (Form 5329 Part I) apply to an excess non-deductible IRA contribution received before taxpayer is 59 ½. … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,311 satisfied customers
Regarding filing amended returns, the year we're amending is
Regarding filing amended returns, the year we're amending is within the 3-year SOL but the reciprocal year to correct the mistake in Accrued Income is outside the SOL and will be a Tax Due situation. … read more
Dr. Fiona Chen
Dr. Fiona Chen
Certified Public Accountant (CPA)
738 satisfied customers
I am doing an amended return for a couple that are now
I am doing an amended return for a couple that are now divorced. They both paid their share of the liability based on their portion of income. The amended return was done because income and expenses w… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
My question is how to change the tax rate on the Panasonic
My name is ***** ***** My question is how to change the tax rate on the Panasonic 7500? thank you … read more
taxmanrog
taxmanrog
Master\u0027s Degree
815 satisfied customers
I intended to request a traditional IRA distribution in
I intended to request a traditional IRA distribution in 2017. Unfortunately I miscalculated the date and missed the deadline by 1 day. If I request it tomorrow, the financial institution that holds my… read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,051 satisfied customers
Can traditional IRAs in a brokerage firm be transferred to a
Can traditional IRAs in a brokerage firm be transferred to a cash account to another fund in the firm. I am 76 and take the required distribution each year. My spouse died in 2916 and I inherited them… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
14,120 satisfied customers
Can one take a distribution from a traditional IRA to pay
Can one take a distribution from a traditional IRA to pay for a dependents college tuition without incurring the 10% early withdrawal penalty?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Will the new tax rates for businesses apply to sole
Will the new tax rates for businesses apply to sole proprietor medical practices? … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
I have about 42k in a traditional IRA, 23k from a before tax
I have about 42k in a traditional IRA, 23k from a before tax pension roll over, 5k in gains, ~8k in constructive, the remainder in dividends. If I want to withdraw 10k for a first time home purchase, … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
IfI cash in a traditional IRA and pay the taxes on it, can I
IfI cash in a traditional IRA and pay the taxes on it, can I spread the income amount out over 5 years ..... to show my income decreased annually? If I show the whole amount as income then my medicare… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Received a CP2000 from IRS on Retirement distributions I am
Received a CP2000 from IRS on Retirement distributions I am 54 years old and closed my retirement accounts when I became disabled I am on SSDI now and didn't think I had to pay the 10% penalty… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
Assuming a Medicare tax rate of 1.45% and monthly gross
Assuming a Medicare tax rate of 1.45% and monthly gross wages of $2,500, the amount recorded in Medicare Tax Payable for one quarter for the employee's payroll deduction is… read more
taxmanrog
taxmanrog
Master\u0027s Degree
815 satisfied customers
What rate of withholding is applicable for a domestic
What rate of withholding is applicable for a domestic partnership with 2 foreign partners upon the selling of a rental property in US. … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
What are the taxes rates 2016 for term gains in irrevocable
what are the taxes rates 2016 for long term gains in irrevocable trusts … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,311 satisfied customers
Impact of tax changes on filing amended returns... Client
Impact of tax changes on filing amended returns... Client filed a 2016 tax return on time in 2017. If the tax laws change significantly, which laws apply when amended returns are filed... the tax laws… read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,051 satisfied customers
I need to complete form 5329 for an RMD due but not taken on
I need to complete form 5329 for an RMD due but not taken on an inherited IRA. I have the instructions but they aren't clear to me. I have entered the RMD amount of $1780 on line 52. I have entered th… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I need to prepare a non- withholding or reduce withholding
I need to prepare a non- withholding or reduce withholding certificate so my client can sign before transferring the tax to the IRS under FIRPA.My client and his brother owns an apartment for 500k 50%… read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,051 satisfied customers
What would the federal and state tax rate percentages be for
What would the federal and state tax rate percentages be for a $7700 IRA early withdrawal in Ohio?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,051 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x