Can I withdraw a contribution I made to my traditional IRA account without tax consequences?
I contributed to my traditional IRA account last year. However, my income for the current tax year is not low enough to receive any tax benefits for this contribution. Can I withdraw the contribution without tax consequences? If there are tax consequences, how much? I had a good return on that contribution, as well as previous holdings in the same traditional IRA account.
If you contributed to your traditional IRA with after-tax dollars, your tax-return from the appropriate year should reflect that. You need to use this tax-return info to not pay tax on the contribution. You will need to pay tax on any gain you make when these dollars are withdrawn. You will also need to pay attention that you are satisfying withdrawal time requirements so that you don't pay penalty on early withdrawal. It is said that if you contribute to your traditional IRA with after-tax dollars, find a suitable time by working with your accountant, if necessary, to see when you can convert the traditional IRA to Roth IRA. You will also need to work with a good financial advisor to make this transition to make the most of your money.
If you have the ability to participate in a workplace retirement plan (even if you choose not to), you generally cannot put money into an IRA and deduct the contribution. There are income limits to this and it depends on your marital status. For more details, check the irs.gov and search deductability of IRA contributions.