Tax Info
I have an inherited IRA, self directed from my mother, I am thinking about pulling all the money out (it is with Merrill Lynch) and closing that account- when doing the withdrawal there is an option to have taxes taken out right then, my question is when I have the taxes taken out with the withdrawal …. will I also have to pay taxes again when I report the withdrawal on my 2017 taxes?
Permalink Submitted by Alan - IRA critic on Thu, 2018-07-19 23:49
Your 2017 taxes would only report distributions you took out in 2017. If you take a full distribution this year, your taxable income will be the amount distributed this year, both the amount paid to you and the amount withheld for the IRS. You only pay taxes once for amounts distributed including withholding. Look at the withheld amount as if it was paid to you and then you forwarded it to the IRS.
Permalink Submitted by tara wright on Fri, 2018-07-20 16:00
Thank You….I ment my 2018 taxes.. not 2017. I will apply your response with the correct year..