Posted on Saturday, January 22, 2011
There are a couple of options available that might free up much needed money for you or a loved one including possible tax breaks or retirement plan exemptions. For instance, if you've been unemployed for 12 weeks or more, you can take money out of an IRA to pay health-insurance premiums for you and your family -- without paying the usual 10 percent penalty for pre-retirement withdrawals. You'll still be taxed on any contributions you made to a traditional IRA that you also deducted on your tax return. You'll also be taxed on any tax-deferred growth of your contributions. But you won't have to pay the 10 percent early distribution penalty. And if you take money ( officially called "distribution") from a Roth IRA, you won't be taxed on it at all until you begin withdrawing earnings.
Of course, if you're 59-and-a-half, you need not worry. You can generally tap into your IRAs without much worry about taxes or penalties.
Definitely talk to you tax professional and whatever professional is assisting you with this before you make a move to be sure you've got the most current rules and you're doing everything correctly