Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Does this strategy make any sense?

Can you take an early IRA distribution near year's end and use the tax owed to offset tax deductions such as mortgage interest,etc.......
AND THEN.....
pay it back in the following tax year, within the 60 day window to avoid the penalty?


It doesn't make any sense to me, but then maybe I don't understand what you're trying to accomplish.

If you take an early IRA distribution, you have cash in hand. You will owe tax on (part of/all) the distribution + 10% penalty on the taxable portion of the distribution. Tax deductions such as mortgage interest, etc. reduce the tax you owe.

So, tell me again, why do you want to do this?

Ira

Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement