We needed to use some of the money, so we took some from my account. In an effort to avoid incurring taxes and associated penalties, we then took from my husbands account and paid back my account before the 60 day time limit was up. This was in the hope that we would earn enough in the interim to pay his account back within the 60 days as well, but that hasn’t happened yet.
So now I’m wondering if I can legally move money from his account to mine every 59 days in order to avoid penalties and taxes. I’m just trying to buy some time for our new business to become profitable. The 10% penalty hurts.
You can only “borrow” from your IRA once per one-year period. It appears that any money you withdrew from your account to pay back his account at this point would have the taxes and penalties applied to it.
I thought that even though the funds were repaid back into the IRA to avoid the tax liability, that the tax still had to be paid to the IRS and that it would be refunded when you files your tax return. Continually doing that (which you can’t, as mentioned) would tie up a lot of cash.