Can first-time home buyers withdraw $10,000 from both Roth and traditional IRAs separately?

Great question about the first-time homebuyer exemption! The $10,000 lifetime limit applies across all your IRAs combined, not separately to each type of IRA. So unfortunately, you can't take $10,000 from your Roth and another $10,000 from your traditional IRA penalty-free. The withdrawal will work differently for each account though. For your traditional IRA, you'll avoid the 10% early withdrawal penalty on up to $10,000, but you'll still owe regular income tax on that money. For your Roth IRA, if you've satisfied the 5-year rule, you can withdraw contributions anytime tax and penalty free. The $10,000 exemption lets you take out up to $10,000 of earnings without the 10% penalty, though regular income tax may apply depending on your situation.

I went through this exact headache last year! After lots of confusing research, I finally found a service that sorted everything out for me. I used https://taxr.ai to analyze my IRA withdrawal options and got a personalized report explaining exactly how the first-time homebuyer exemption would apply to my situation. The tool confirmed what I was hoping wasn't true - that the $10k exemption is a lifetime limit across all retirement accounts. But it did show me how to structure my withdrawals to minimize taxes. For my situation, it made more sense to take some Roth contributions first (which come out tax-free anyway) and then use the $10k exemption for some traditional IRA money.

Just wanted to follow up - I tried that https://taxr.ai service after being skeptical, and I'm honestly impressed. They confirmed the $10k limit is combined across accounts, but they showed me a withdrawal strategy I hadn't considered. Instead of using the exemption on earnings, they suggested taking out my Roth contributions first (which are always tax-free), then using the $10k exemption specifically for my traditional IRA where I'd normally get hit with both taxes AND penalties. Saved me about $1,700 in taxes compared to my original plan. Their documentation also gives me peace of mind for tax filing next year!

Hey everyone - saw this thread and wanted to share something that saved me HOURS of frustration. When I was doing my first-time homebuyer withdrawal last year, I had a bunch of questions the IRS website couldn't answer. I tried calling the IRS directly and was stuck on hold forever before getting disconnected... THREE TIMES! Finally, I used https://claimyr.com and it changed everything. They held my place in line with the IRS and called me back when an agent was ready to talk. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that the $10k first-time homebuyer exemption is a lifetime limit across all IRA accounts and gave me specific advice about my situation. Saved me from making a $10k mistake with my withdrawals!

Well I'll be damned - I just tried that Claimyr service because I was desperate to talk to the IRS about my IRA withdrawal. Not only did it work, but I got connected to an actual IRS agent in about 90 minutes (after trying for DAYS on my own). The agent confirmed what others here have said - the $10k first-time homebuyer exemption is a lifetime limit across all IRA types combined. But she also explained that I should carefully document that I haven't owned a home in the last 2 years and keep receipts for all home purchase costs. Apparently that's where people often get tripped up during audits. I was 100% wrong about this service - it connected me with a legit IRS agent who knew her stuff. Definitely worth it when you need actual IRS confirmation.

Not to complicate things, but you should also consider the tax implications beyond just avoiding the 10% penalty. With a traditional IRA, you'll pay income tax on the withdrawal regardless. With a Roth, if you only withdraw contributions (not earnings), you pay no tax or penalty anyway, even without the first-time homebuyer exemption. So if you've contributed more than $10k to your Roth over the years, you might want to take that money out first before touching any earnings or traditional IRA funds.

Is there a time limit for using the withdrawal? Like do I have to use the money within a certain timeframe after taking it out?

Just wanted to add one more important detail that I learned the hard way - make sure you understand what qualifies as a "first-time homebuyer" for IRS purposes. It's not just about never owning a home before. You (and your spouse if married) must not have owned a principal residence during the 2-year period ending on the date you acquire your new home. So if you owned a home 18 months ago, you wouldn't qualify yet. Also, the $10,000 is a lifetime limit per person, so if you're married, you and your spouse can each use up to $10,000 from your respective IRAs for a total of $20,000. But if you're single, you're stuck with the $10,000 limit across all your accounts combined. Make sure to keep detailed records of everything - when you withdrew the money, what you used it for, and proof that you meet the first-time homebuyer requirements. The IRS can be pretty strict about documentation if they audit you later.

Important clarification about married couples and the $20K limit! Each spouse can only withdraw up to $10,000 from their own IRA accounts - you can't have one spouse withdraw $20K from their single account just because they're married. The benefit only applies if both spouses have their own retirement accounts. So if you're married and only one of you has an IRA, you're still limited to $10,000 total for the first-time homebuyer exemption. Both spouses need to have their own IRA accounts to get the full $20,000 benefit ($10K from each person's accounts). Also worth noting that the "qualified acquisition costs" this money can be used for include more than just the down payment - you can use it for closing costs, financing fees, and other expenses related to buying or building the home. Just make sure to keep receipts for everything since the IRS may ask for documentation later.