I am about to become a first-time home buyer with my fiancé in Pennsylvania. I am using an IRA I have with Wells Fargo as part of my down payment. The account totals $11,411. How much should I set aside for taxes and fees? I am 28 years old.
The maximum you can take out of an IRA as a first-time homebuyer is $10,000 to avoid the 10 percent early distribution penalty.
The $10,000 will still be subject to regular income tax. The tax amount will depend on your marginal tax rate.
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Answered by: Joseph G. Tropiano II, CPA, is with Siana, Carr, O’Connor & Lynam LLP in Paoli, Pa.