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Are you temporarily in a low income situation? Are you over 59 ½, and do you have an IRA? If you can answer "yes" to all of these questions, you may want to consider taking distributions from your IRA even if you don't currently need the money.


The standard deduction for married individuals is $10,700 for 2007 ($12,800 if both are over 65.) Personal exemptions are $3,400 each. Therefore, a married couple can have up to $19,600 in income before they would owe any tax. And remember, Social Security is not taxable unless other income plus half of your benefits equals more than $32,000.


So, if your taxable income will be negative, you can withdraw an amount from your IRA sufficient to raise your taxable income to $0. If you don't need the money for current living expenses, you can simply transfer it to a taxable investment or savings account.


In the future, when your income is higher, or you are required to take minimum distributions from your IRA, less money will have to be withdrawn under taxable conditions.


-By Todd Mizer, CPA (Coshocton office)


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