Borrowing Against an IRA

You can use money from your IRA if paid back within 60 days.
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Although you technically cannot borrow from your Individual Retirement Account (IRA), there are no restrictions for what you use the money for once you have it in your hand. A rollover can be taken from your account once each year (per 12 months) as long as it's repaid within the required time frame. If you attempt to deposit the money after the 60-day time period, the rollover is no longer beneficial to you. Therefore, plan to take this “loan” during a time when you know you can repay it to your IRA.

Step 1

Plan the perfect time to receive the money from your IRA. Since you're technically withdrawing this money from your account, in order to still have an IRA account, you need to repay the amount that you withdrew within 60 days from the date the check was issued or the money was directly deposited. Don't wait until the last minute to ensure that you have the money deposited on time. You have the option of depositing the money back into an IRA from the financial institution you withdrew it from or you can choose another institution. If the money isn't deposited back into an account within 60 days, it'll be considered a distribution and you'll lose the benefits.

Step 2

Request a withdrawal or rollover from your IRA and fill out the necessary information. Be prepared by having all of your information on hand including your account information and any additional personal information that may be asked. You also have the option of determining whether you prefer this money to be deposited into your bank account via direct deposit or if you want a check to be mailed to your address.

Step 3

Report this information to the Internal Revenue Service (IRS). Although the withdrawal isn't taxable since it's considered a rollover, the IRS requires that this activity is nevertheless documented. When you report this information, enter "0" on line 15a of the 1040 form or line 11a of the 1040A form and report it as a non-taxable IRA distribution; make sure that you write “rollover” next to the amount.

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