Roth IRA withdrawal rules are to withdraw earnings and not the contributions, to make a Roth IRA withdrawal set of rules must be met in order to make a withdrawal without penalties and taxes. The distributions of earnings must be qualified to make the withdrawals penalties and taxes free, the main attraction of the Roth IRA is that the withdrawals are tax free.
There are four Roth IRA qualifications to withdraw earnings from a Roth IRA account. One of these Roth IRA withdrawal rules must be met in order to make the withdrawals penalties or taxes free. These Roth IRA withdrawal rules are:
1) The owner of the Roth IRA must be 59 and one half years of age or more,
2) The withdrawal must be made to the Roth IRA owner’s beneficiary or estate, but this is possible after the death of the owner.
3) The withdrawal can be made to the Roth IRA owner after they are determined disabled, and have a certification to certify the disability.
4) If the withdrawal will be used to pay for qualified first time home-buyers expenses but there is a limit and the withdrawal can be up to $10,000 in a lifetime.
There are a few other exceptions to the Roth IRA withdrawal rules. Withdraws of earnings may be made without penalties and taxes if:
1) The withdrawal is in a series of equal periodic payments made over the life expectancy of the IRA owner.
2) The withdrawal is used to pay medical expenses of the owner and are not reimbursed, but the withdrawals cannot exceed 7.5% of the Roth IRA owner’s adjusted gross income (AGI).
3) The withdrawal is used to pay for medical insurance premiums after the Roth IRA owner has received unemployment compensation for 12 weeks.
4) The withdrawal is used to pay for qualified higher education expenses for either the Roth IRA’s owner or their eligible dependents.
5) The withdrawal is used to pay taxes to the Internal Revenue Service after a levy has been placed on the Roth IRA.