Early IRA distribution penalty: Medical costs can

Yes, you may be able to avoid the 10% penalty on an IRA distribution if it is for unreimbursed medical expenses that exceed 7.5% of your Adjusted Gross Income (AGI) for the year. Here's a breakdown of how it works: Medical Expense Exception: If your qualified unreimbursed medical expenses are more than 7.5% of your AGI in a given year, you can withdraw funds from your IRA to cover these expenses penalty-free. Disabled Status: If you are deemed to be "totally and permanently disabled," you may be able to withdraw IRA funds without the 10% penalty. This typically means you are unable to engage in any gainful activity because of a physical or mental condition expected to be of long-continued or indefinite duration or result in death. Qualifying Medical Expenses: This exception generally applies to most medical, dental, and vision treatments that diagnose, prevent, or treat disease. Timing: The IRA distribution must be made in the same year that the medical expenses were paid. No Itemization Required: You don't need to itemize deductions on your tax return to take advantage of this exception. Income Tax Still Applies: Even with the penalty waiver, the distributions from a Traditional IRA will still be subject to ordinary income tax. THere are other ways to avoid the penalty too! Give us a call at 813-657-4137 tp discuss!