IRA Without a Cause

Today TaxMama hears from Chris in the TaxQuips Forum  who says. “I took money out of an IRA for a down payment on a house (after a divorce) and was intending to pay it back within the 60 days. My employer hinted I should start looking for a new job. So I think I want to hang on to the money as a buffer. My question is, should I make a quarterly tax payment for the IRA money?”

Dear Chris, 

Roll that money back into a NEW IRA.  Do not re-deposit it into the old IRA. File for unemployment if you get laid off.

 Then, if you still need money, THEN draw money out of the IRA. 

 You can avoid paying taxes on it for now.  You can skip the current estimated tax payment.

And, who knows, maybe you can come up with a clever way for your employer to increase his income – and get to keep your job. When someone helps generate revenue for the business, they become too valuable to fire.

And remember, you can find answers to all kinds of questions about IRAs, and other tax issues, free. Where? Where else? At www.TaxMama.com.

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