Early IRA Distribution

[RetireAge50]

We recently needed to withdraw $90,000 from my traditional IRA. We did this through Vanguard without any tax withholding. A week later we sent the money back in full.

From what I have read this should have no tax implications as it is treated as a rollover within a 60 day window.

Does anyone know of any tax issues I may encounter come tax time? Will this impact ACA calculations?

Seems like an easy way to get bridge money for short periods.

 

[kaneohe]

Think you should be ok. Just remember that you can only do this indirect rollover once every 365 days........not once per calendar yr. And that this includes both Roth and TIRA......not once for each, one total.

 

[SecondCor521]

You'll have to report it on your federal income tax return for the year in which you did this. You put the full amount of the distribution on 4a, but enter $0 on 4b. You also need to write "ROLLOVER" next to line 4b. If you did it this year, see the 2019 instructions for Form 1040, page 29, first column, Exception 1.

Since it doesn't affect your taxable income, it won't affect ACA calculations.

kaneohe's warning is accurate, so keep that in mind. I think it is to discourage using IRA funds for bridge money. The penalties for violating this particular rule are very severe.