Are Your Roth IRA Distributions Really Tax-Free?

When you opened your Roth IRA account, you may have assumed all distributions would always be tax-free. This, however, is a common misunderstanding that may lead to unexpected taxes down the road. While Roth IRAs offer significant tax advantages, there are certain circumstances where distributions can be subject to income tax.

Roth IRA distributions can consist of contributions, converted funds and earnings—or any combination of the three. Understanding the differences between the types of funds you’re withdrawing, as well as how your age impacts your distribution, can help you better avoid paying unnecessary taxes on your Roth distributions.

To learn more, click here to download “Determining Tax on Roth IRA Distributions in 5 Easy Steps” for an overview on how to navigate these rules and protect your tax-free withdrawals.

For more information on how Roth IRA distributions fit into your overall retirement strategy, contact our office at 516-294-5287.