Penalty-free Loans

admin • February 13, 2019

February 11, 2019

Need cash? You may have penalty-free options

Suppose you need cash quickly. Then you remember that you have an IRA. While you can’t take out a loan from your IRA, you may have other options — including access to funds short-term without any tax consequences.

  1. 60-day IRA rollover: IRA withdrawals are generally taxed at ordinary income rates, plus a 10 percent penalty applies to distributions before age 59 1/2. However, you can avoid the tax and any penalty by redepositing (“rolling over”) the funds into an IRA before the 60-day deadline. Only one such IRA-to-IRA rollover is allowed each year.Of course, using money from an IRA like a short-term loan is often a last resort. Consider your other options first.
  2. 401(k) loans: Other retirement plans often do allow loans. If your plan permits it, you may borrow 50 percent from your account balance, up to a maximum of $50,000. The loan must be repaid within five years. Although you’re paying interest at a relatively low rate to yourself, the loan effectively reduces your retirement savings.
  3. Home equity loans: Banks generally offer lower rates for home equity loans than credit cards. However, the loan must be secured by your home. Also, recent tax legislation eliminates deductions for most home equity loans.
  4. Personal loans: With a personal loan, you don’t have to put up your home as collateral, but the interest rate is likely higher than the rate for a home equity loan. Generally, the loan term is one to five years.
  5. Credit cards: This is a common way to borrow money, but it’s costly. Typically, the interest rates hit double digits. If you’re buying an expensive item you may benefit from an introductory no-interest card.

You’ll need to consider the best solution for your situation. Call if you have questions about tax consequences surrounding IRA withdrawals and contributions.

Current Job Openings

By admin • October 18, 2021
CPA or Candidate Job details Benefits & Perks Health insurance, Paid time off, Professional development assistance Job Type Full-time Qualifications… The post Current Job Openings appeared first on Omlin, Gunning & Associates, P.S..

September Newsletter

By admin • September 24, 2021
How to Reduce Your Property Taxes Market values of homes are skyrocketing and higher property tax bills are soon to… The post September Newsletter appeared first on Omlin, Gunning & Associates, P.S..

Tax Deadlines

By admin • March 12, 2021
What you need to know now! Deadlines for 2021 remain in tact for now. The IRS at this point has… The post Tax Deadlines appeared first on Omlin, Gunning & Associates, P.S..

October Newsletter

By admin • October 1, 2020
This month: October 15  – Extension deadline for individual and C corporation tax returns October 31  – Halloween Does your… The post October Newsletter appeared first on Omlin, Gunning & Associates, P.S..

July Newsletter

By admin • June 25, 2020
This month: July 4  – Independence Day July 15  – Individual income tax returns for 2019 are due  – C… The post July Newsletter appeared first on Omlin, Gunning & Associates, P.S..

June Newsletter

By admin • May 28, 2020
This month: June 21  – Father’s Day This month’s newsletter details several reasons why you should look for other sources… The post June Newsletter appeared first on Omlin, Gunning & Associates, P.S..

May Newsletter

By admin • May 15, 2020
This month: May 10  – Mother’s Day May 25  – Memorial Day COVID-19 uncertainty abounds for everyone. This month’s newsletter… The post May Newsletter appeared first on Omlin, Gunning & Associates, P.S..

April Newsletter

By admin • April 8, 2020
This month: April 15 (Extended to July 15)  – Individual tax returns due  – C corporation tax returns due  –… The post April Newsletter appeared first on Omlin, Gunning & Associates, P.S..

Additional Paid Leave for Workers Affected by COVID-19

By admin • March 31, 2020
What you need to know! The Families First Coronavirus Response Act is a new program that offers COVID-19 assistance for… The post Additional Paid Leave for Workers Affected by COVID-19 appeared first on Omlin, Gunning & Associates, P.S..

COVID-19 Bill Enhances Your Unemployment Benefits

By admin • March 31, 2020
What you need to know! The recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act provides individuals and businesses… The post COVID-19 Bill Enhances Your Unemployment Benefits appeared first on Omlin, Gunning & Associates, P.S..
More Posts
Share by: