Q: I’m 49 and was laid off due to COVID cutbacks. A former co-worker says I can tap my IRA tax-free this year. How do I do that?A.: Tim, there is no provision for tax-free IRA distributions. What your ex-coworker may be referring to is a Covid-related Distribution. The CARES Act, aka the stimulus package, passed earlier in the year waives the 10% penalty normally incurred for IRA withdrawals prior to 59½ if you were adversely affected by COVID.
When you take the distribution you can either report all the income on your 2020 tax return or split the income evenly over 2020, 2021, and 2022. You cannot split in any other proportion. It is important to note that you are splitting the income and not the taxes due. If you take $45,000 of distributions, you are either putting $45,000 of distributions on your 2020 tax return or $15,000 on the 2020, 2021, and 2022 returns respectively.
IRA's are taxed heavy when used as a just savings account. The IRS could be the financial version of the U.S. Army when it come to compassion.
thanks
What a moneymaking scam.
Plenty of jobs, most do not pay. The main thing is get another job & keep going ! Americans are stagnating , sitting , T.V. etc. , waiting on free money.
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