"jIM" <noreplysoccer@[EMAIL PROTECTED]
> wrote
> 2) can the health care premiums get paid from a rollover
> IRA, prior to
> age 50, without tax or penalty (because the payments are
> for
> healthcare).
>
> 3) Is it better, worse, or indifferent to use monies in a
> taxable
> account to pay the health care premiums. There is a part
> of my mind
> suggesting the rollover IRA has never been taxed, and the
> health care
> premiums are not taxed, so that is best use of money.
I read this and thought maybe you were contemplating a
strategy using a Health Savings Account, as follows:
1.
Get a high deductible health insurance plan that qualifies
under HSA rules.
2.
Take money out of your Trad IRA for medical expenses,
including health insurance premiums. You will meet the
exception for no penalty. But so far, you are stuck paying
taxes on the distribution, per line 15 of Form 1040.
3.
Put money into Health Savings Account. For a family,
currently up to $5800 is deductible each year on line 25.
This will cancel out some or all of the Trad IRA
distribution you have to re****t as income, so the net effect
is you pay no taxes on the distribution.
4.
Also, one time only, a person can roll money directly from a
Trad IRA to an HSA, limited to one year's maximum allowed
HSA contribution.
The money you stowed in the HSA can be tapped after your
Traditional IRA money is gone. You pay no taxes on HSA
withdrawals, as long as they are for qualified medical
expenses. You can invest in the HSA any way you want.
I would check the IRS rules further before doing this. Or no
doubt someone here might poke a hole in it.
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