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If a IRA customer under 59 1/2 takes money out of his IRA and decides that he took to much money out. Is he able to deposit his extra money back into the IRA within the 60 day period?


Expert Matthew Peterson's Answer:

Funds taken out of an IRA by a taxpayer under the age of 59 1/2 can be paid back into the IRA within the 60-day period immediately following the original withdrawal date with no consequence. The IRS will regard this as a non-taxable event based on the 60-day rollover rules applicable to IRAs. However, the language used by the IRS gives indication that if the FULL amount distributed from the IRA is not then deposited back or rolled-over to a new IRA within the 60-day period, then the entire distribution will be taxable and subject to the early withdrawal penalty of 10%.

Matthew Peterson, CPA


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