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How to withdraw funds from my traditional IRA

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A traditional IRA, or personal retirement account, helps people save money for retirement by deducting taxes on contributions to the account and allowing for tax-free increases as long as it remains in the account. However, when you withdraw funds from an account, you must include it as taxable income. While the IRS doesn’t prohibit people from withdrawing before retirement, if you withdraw before age 59 and a half, you’ll have to pay a 10% penalty in addition to income tax.

How to Withdraw Money from My Traditional IRA | Onefctv

Step 1
Complete the necessary paperwork available from your financial institutions. Each financial institution has a slightly different form. The form will ask you for your identifying information, such as your name, address, and Social Security number, as well as your account information.

Step 2
Get a 1099-R form from your financial institutions at the end of January next year. You’ll need this form to pay taxes, so if you haven’t received it by February 1, contact your financial institutions.

Step 3
Report the total amount of your traditional IRA withdrawals, found in box 1 of Form 1099-R, on line 15a of form 1040, or line 11a of Form 1040A.

Step 4
Report the taxed portion of your withdrawal, available in box 2a of Form 1099-R, on line 15b of form 1040 or line 11b of Form 1040A. Unless you make contributions that are not deductible to your traditional IRA, the taxable amount will be equal to the total amount. If you are at least 59 and a half years old, you are finished.

Step 2
Get a 1099-R form from your financial institutions at the end of January next year. You’ll need this form to pay taxes, so if you haven’t received it by February 1, contact your financial institutions.

Step 3
Report the total amount of your traditional IRA withdrawals, found in box 1 of Form 1099-R, on line 15a of form 1040, or line 11a of Form 1040A.

Step 4
Report the taxed portion of your withdrawal, available in box 2a of Form 1099-R, on line 15b of form 1040 or line 11b of Form 1040A. Unless you make contributions that are not deductible to your traditional IRA, the taxable amount will be equal to the total amount. If you are at least 59 and a half years old, you are finished.

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