I have a couple of quick questions about taxes on IRA withdrawals. Neither my wife nor I have a lot in of money in IRAs but I am running a few projections on how I can put my arms around a fairly large chunk of cash with the last tax hit.
Each of our IRAs are spread across a Traditional IRA, a Rollover IRA (from our 401K/403B accounts) and a Roth. The Roths are very small. Of the total amount in each of our IRAs, about 10% represents contributions made with post-tax money; all the rest is pre-tax. My understanding is that when you withdraw from your IRA, regardless of how many individual accounts you have, it is all considered one big IRA for computing taxes due on them. (In other words I can't just try to take a tax-free withdrawal from that I amount that I contributed post-tax.) So if I am correct on that, my questions:
- Does the Roth count in those computations or can I just withdraw tax-free from the Roth without regard to the other IRAs?
- For the non-Roth portion, would I be paying taxes on 90% of the withdawal (because taxes have already been paid on 10% of the money)? I assume the IRS has a form for all this.
- My wife and I file jointly; I assume that it makes no difference whether the withdrawals are from her IRA or mine as either will show up as joint income on the tax return. Or is there something here I'm missing?
Thanks in advance for any responses.
Each of our IRAs are spread across a Traditional IRA, a Rollover IRA (from our 401K/403B accounts) and a Roth. The Roths are very small. Of the total amount in each of our IRAs, about 10% represents contributions made with post-tax money; all the rest is pre-tax. My understanding is that when you withdraw from your IRA, regardless of how many individual accounts you have, it is all considered one big IRA for computing taxes due on them. (In other words I can't just try to take a tax-free withdrawal from that I amount that I contributed post-tax.) So if I am correct on that, my questions:
- Does the Roth count in those computations or can I just withdraw tax-free from the Roth without regard to the other IRAs?
- For the non-Roth portion, would I be paying taxes on 90% of the withdawal (because taxes have already been paid on 10% of the money)? I assume the IRS has a form for all this.
- My wife and I file jointly; I assume that it makes no difference whether the withdrawals are from her IRA or mine as either will show up as joint income on the tax return. Or is there something here I'm missing?
Thanks in advance for any responses.