IRA funds are typically used for retirement purposes, but in times of need, you can withdraw funds from your IRA. The Internal Revenue Service normally charges penalties for early withdrawal, but if you can prove that you are unemployed, you can use your IRA money without any penalties. Use IRA withdrawals sparingly to keep the account balance up for interest earnings. Pay income taxes on your IRA money to avoid audits.
Draw unemployment for 12 consecutive weeks to avoid withdrawal penalties on your IRA fund. The federal government will not penalize your account if you have received unemployment for the 12 weeks. Keep your unemployment check stubs or direct deposit statements to prove that you collected unemployment benefits.
Check your calendar. If it has been more than a year since you last received unemployment, the IRS will charge a 10 percent early-withdrawal fee. Taxes and fees will take a substantial chunk of your total IRA.
Contact your bank and request a withdrawal from your IRA account. Your bank may need 24 or more hours to assemble the money for your request, depending on the amount. Banks do not usually carry large amounts of cash on hand for security purposes, so you may have to wait.
Collect the money from your bank. Do not take more money from your IRA than you need for living purposes. The money left in the account will still make capital gains even if you make a withdrawal.
Save your banking records for your federal income taxes. You will pay taxes on your IRA withdrawal, so you need the exact amount you took out for filing purposes. When you file your individual return, include your unemployment benefits proof to avoid the 10 percent penalty.
Ask your financial institution to transfer your IRA money to a checking or savings account. Carrying around your IRA money or keeping the money at your home is not safe.
- Ask your financial institution to transfer your IRA money to a checking or savings account. Carrying around your IRA money or keeping the money at your home is not safe.
Aaron Marquis is a University of Texas graduate with experience writing commercials and press releases for national advertising agencies as well as comedy television treatments/stories for FOX Studios and HBO. Marquis has been writing for over six years.