IRA question

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Years back, I converted my traditional IRA to a Roth, and most of my efforts are to try to max that out each year.

We left my husbands traditional IRA alone, as contributions were made to that on a much lesser scale, and him being closer to the time he'd want to draw on it, it didn't matter as far as what it would earn. (he's over 59 and a half)

It's just got a few thousand in it.

Can all that money be drawn out at the same time, or is there some kind of percentage limit?

I know we'd have to pay income tax on that money, since it was a traditional IRA.

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@chai2,

I'm almost 100% certain the entire amount can be drawn out at once, and without penalty. And you're right, it is taxable at the ordinary income rate. Possibly, this years tax rate will be better than next year's.

If there were otherwise advantages to being Married Filing Separately, he might, separately, be able to slick it out without paying taxes, but it would have to be an almost unique situation to make that catagory pay out.

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@roger,

Thanks roger.

Not that I would do this, but what makes a person eligible for married filing separately?
Wouldn't you have to be living under different roofs?

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@chai2,

No. You just have to file separate returns with your own income and deductions. It's usually only advantageous when one person has a lot of medical bills that can be deducted against his/her own income. You're both still taxed at the married rate, so it isn't in general a good idea.

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@chai2,

heh, maybe in our case it would make sense. I'd have to run the numbers.

Married taxpayers can choose between filing a joint tax return or a separate tax return. The Married Filing Separately filing status provides fewer tax benefits than filing joint returns, but taxpayers will need to weigh the pros and cons and decide for themselves which is the best filing status.
If you are married, then you and your spouse can file separate tax returns. The married filing separately (MFS) filing status is the least beneficial of all the filing statuses. That's because MFS taxpayers are not eligible to claim the following tax benefits:

Tuition and fees deduction
Student loan interest deduction
Tax-free exclusion of US bond interest
Tax-free exclusion of Social Security Benefits
Credit for the Elderly and Disabled
Child and Dependent Care Credit
Earned Income Credit
Hope or Lifetime Learning Educational Credits
MFS taxpayers also have lower income phase-out ranges for the IRA deduction.

Additionally, MFS taxpayers must both claim the standard deduction or must both itemize their deductions. In other words, one MFS taxpayer cannot claim the standard deduction if the other spouse is itemizing.

We don't have any of the above, and we take the standard deduction, since the house is paid off.

Veddy Interesting.

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@chai2,

Glad I brought that up, then, but run the numbers both ways.

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