IRA #1 For SEPP, IRA #2 for Medical Premiums

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L1: IRA #1 For SEPP, IRA #2 for Medical PremiumsI will be starting a SEPP withdrawal program from one of my IRAs in 2013. I also want to withdraw funds from a separate IRA to cover medical insurance premiums.
Can I withdraw funds in 2013 to cover 2012 premiums if I do it before April 15?
From here on out I’ll withdraw funds during the year that I make the premium payments. Does it matter if funds come my my IRA vs. spouses IRA? Both of us are on the insurance policy.
Thanks.2013-03-24 20:44, By: nvestysly, IP: []

L2: IRA #1 For SEPP, IRA #2 for Medical PremiumsI’ve been researching the idea of using IRA withdrawals for medical insurance premiums. I’m beginning to think I cannot use this approach.
Here’s more of my story…
Left work voluntarily in July 2011. Did not receive unemployment compensation. I simply retired early and hope to remain that way. Am I eligible to withdraw funds to pay medical insurance premiums?2013-03-25 01:48, By: nvestysly, IP: []

L3: IRA #1 For SEPP, IRA #2 for Medical PremiumsYou cannot take distributions from an IRA in 2013 for health insurance premiums you paid in 2012.
You can take distributions in 2013 for 2013 health insurance premiums, and it will be subject to income taxes, but will be eligible for the applicable exclusion from the 10% penalty for early distributions before 59 1/2 so long as you are deemed to be UNEMPLOYED. While you COULD PROBABLY take the distributions from the SEPP 72-T, this creates a complexity that you SHOULD AVOID by taking the amount for the health insurance premiums from the other IRA, and filing the applicable 5329 form to report the exclusion fot THAT ACCOUNT.
HOWEVER, since the exclusion refers to “UNEMPLOYED INDIVIDUALS”, you may not be eligible because you RETIRED after becoming unemployed. You may have a problem qualifying 1 1/2-2 years after becoming unemployed.
BUT, you might qualify under the other exclusion for medical expenses in excess of 7.5% of AGI.2013-03-25 04:21, By: dlzallestaxes, IP: []

L4: IRA #1 For SEPP, IRA #2 for Medical PremiumsThanks for the reply. In retrospect, had I utilized COBRA for 18 months prior to signing up for individual coverage I might have increased my chances of making a case for being unemployed. Similarly, had I signed up for unemployment compensation after leaving my employer that would have certainly greased-the-skid for being unemployed. Oh well… I left voluntarily and I knew (more or less) what I was getting into so I can live with it. Just thought the question was worth asking.
I can use the 7.5% rule but that doesn’t really achieve the withdrawal amount that I want and the math can be a bit tricky if you don’t pay close attention. But maybe this deserves a second look.
Thanks again. This forum is a wonderful resource2013-03-28 13:21, By: nvestysly, IP: []