taking money out of an IRA

[falmouth3 Senior Member Find all posts View Profile Close falmouth3]

For years my 82 yo mother has been taking the minimum distribution from her IRA. This year she has a cash flow problem and would like to take the balance of her IRA. Would doing this cause any issues? I think the total amount of money left in the IRA is about 20K.

Thanks for your help and advice.

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

Depends.

If it is Standard IRA, rather than a Roth, which I assume it is since you are talking about mimimum distributions, it will create an income tax liability.

I took a distribution last year and paid the price this month.

[Carlos Senior Member Find all posts View Profile Close Carlos]

It Depends...

It all depends on her financial situation. She will have to pay taxes on the 20k as stated earlier. However, her tax liability will be dependent upon any income she has received this year including social security and any pensions.

If she does not have much income to report then she may be fine. There will be no penalties for withdrawals of any kind from her IRA because of her age.

[falmouth3 Senior Member Find all posts View Profile Close falmouth3]

Thanks. I know that she'd have to pay income tax on the withdrawal. This year she doesn't owe any taxes so the impact will probably not be too bad on her income tax.

I appreciate the help.

Sue

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

Yeah, that's what I meant.

I'm assuming low/little income, so that $20K would be a significant amount, relatively.

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

20 k would make her social security also partially or fully taxable, depending on any other taxable income. Calculating the taxibility in advance could save some money by reducing the withdrawal.

[BoardGirl Senior Member Find all posts View Profile Close BoardGirl]

I would caution her not to take ALL of it for no reason other than to keep the tax shelter going, preserve some capital for next year and onward. She should be able to take multiple distributions in one year so long as she takes out the minimum.

Watch the tax bite if she's not having anything withheld.