taking RMDs
can I close out my IRA in one transaction ? I have both taxable and non taxable income in my IRA. I have over $500 dollars of non taxable income which I can only report a fraction of every year.
Terry Says
I really don’t understand your question.
Let me assume that you made pre-tax and after tax contributions to the same IRA? That was a mistake! And only your IRA custodian can tell — and WILL tell you — how much of any distribution is taxable as ordinary income.
Or did you make after-tax contributions to a traditional IRA, but the growth will come out taxed as ordinary income? Again, your custodian can tell you your tax liability, which will be calculated pro-rata on any distribution you take.
You can “close out” your IRA at any time after age 59-1/2 without penalty. BUT all that taxable income will be added to your other income. It could put you in a higher tax bracket, and if you’re on Medicare it could increase your Part B and D Medicare premiums.
Please consult with your tax advisor before making this move.
