Ira

Collapse
X
 
  • Time
  • Show
Clear All
new posts
  • Ricardo
    Member
    • Jul 2005
    • 66

    #1

    Ira

    Can't seem to find info on deductibiity of early withdrawal penalty charged client WITHIN the IRA.

    Any one =

    Regards = Ricardo
  • AZ-Tax
    Senior Member
    • Feb 2008
    • 2604

    #2
    Well

    [QUOTE=Ricardo;117877]Can't seem to find info on deductibiity of early withdrawal penalty charged client WITHIN the IRA.

    I am not sure the 10% early withdrawal excise tax is deductible. Kinda of defeats the purpose of having a penalty.

    Now if you are talking about the IRA itself charged a fee like custodian fee, that is deductible on Sch A subject to AGI phase out.

    If its a surrender charge imposed by the insurance company, that is a good question.

    Comment

    • Burke
      Senior Member
      • Jan 2008
      • 7068

      #3
      Not deductible. Only the amount he actually received is taxable.

      Comment

      • bgiez
        Senior Member
        • Apr 2006
        • 175

        #4
        I agree with Burke.

        Comment

        • Ricardo
          Member
          • Jul 2005
          • 66

          #5
          Ira

          I find now the penalty was charged on a CD within the IRA when it was rolled over to another trustee. Obviously it had not reached maturity.

          Regards = Ricardo

          Comment

          • AZ-Tax
            Senior Member
            • Feb 2008
            • 2604

            #6
            Possibley, Line 30 form 1040

            Line 30 form 1040 does say "Penalty on early withdrawal of saving". If this applied, no AGI phase out.

            Comment

            • FEDUKE404
              Senior Member
              • May 2007
              • 3650

              #7
              Penalties and fees N/A ??

              Originally posted by AZ-Tax
              Line 30 form 1040 does say "Penalty on early withdrawal of saving". If this applied, no AGI phase out.
              If the CD was already "within" the IRA there is no separate adjustment for the early withdrawal penalty. It's really no different than taking a "loss" on a stock within the IRA.

              FWIW: Early withdrawal penalties normally are reported on a Form 1099-INT anyway.

              As for the annual maintenance fees charged by the IRA, if my memory is correct (kinda stressed these days) I don't think you can deduct that on your taxes unless you pay that fee with "new" ( = outside) money. See first paragraph above....

              FE

              Comment

              • Burke
                Senior Member
                • Jan 2008
                • 7068

                #8
                Your memory is right on. When one of my clients was having their fees deducted out of their IRA acct, I advised them to change it. They now pay them directly from another taxable account so they can take the deduction.
                Last edited by Burke; 03-23-2011, 12:18 PM.

                Comment

                Working...