My question is since I'm on disability do I have to pay income tax on all money that I take out of the IRA? ====>BASICALLY,
The IRS will lift some of the restrictions for a disability withdrawal;
You must be permanently and completely disabled, according to the IRS definition, to take advantage of IRA disability rules. You must be unable to perform significant gainful activity, meaning you can no longer work enough to earn a living. A physician must certify that the physical or mental impairment is continuous and of long and indefinite duration, or is expected to lead to death.
How much can I take out before my disability is taxed and/or my disability payment is reduced?
Does anyone know if income from an IRA is treated the same as income from working as it relates to disability?
I do know that I don't have to pay the 10% early distribution fee because I'm on disability.==>Correct however, when you withdraw funds early from a traditional IRA due to a disability, the IRS waives the 10 % penalty. However, money taken out of a traditional IRA is still subject to ordinary income taxes. You must report the withdrawal on your tax return and pay taxes due for the year the withdrawal is made. |