- 1). Review your most recent IRA statement to see how much money you have to work with. If you have online access to your account, you can find an up-to-the- minute balance.
- 2). Estimate how much of your nest egg you need to withdraw to get your new business off the ground. Withdrawing as little as possible will reduce your tax burden and leave you with a larger retirement fund down the road.
- 3). Contact an accountant or other tax-preparation expert to discuss the tax implications of your IRA withdrawal. If you are under age 59 1/2, you can be subject to a 10 percent tax penalty on top of the ordinary income taxes you will owe on the money you take out to start the business. That means if you withdraw $50,000 in seed money to start your business, you will owe $5,000 to the IRS, in addition to the ordinary income taxes owed on that $50,000.
- 4). Call the administrator of your IRA and ask for an IRA withdrawal form. Complete the form and return it to the administrator, along with instructions on how you want to receive the funds. Depending on the administrator, you might be able to receive the funds via direct bank transfer, rather than waiting for a check.
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