Is it true you can't withdraw Roth IRA contributions for 5 years? Getting mixed info about Roth contribution withdrawal rules!

I opened my Roth IRA back in 2022 and have put in about $24k total since then. Recently in late 2024, I had some unexpected car repairs come up and needed to take out around $8k. When I first opened the account, the advisor specifically told me I could withdraw my CONTRIBUTIONS (not earnings) anytime without penalties or taxes. I was like, great, emergency fund if I absolutely need it. Fast forward to now, I'm doing my 2024 taxes and my accountant is telling me I owe taxes on this withdrawal because my Roth IRA hasn't been open for 5 years yet. He's pointing to my 1099-R form that has some distribution code on it. Now I'm totally confused because everything I've read online says you can take out contributions tax-free anytime. Is my tax guy right? Do I really need to wait 5 years before touching even my contributions? Or is he mixing up the rules for earnings vs contributions? I swear I've seen multiple sources saying contributions can come out anytime tax-free, but now I'm doubting everything I thought I knew about Roth IRAs.

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18 comments

Andre Laurent

•8M

Your tax accountant is likely confusing the 5-year rule for earnings with the rule for contributions. There are actually two different 5-year rules for Roth IRAs that often get mixed up. For Roth IRA contributions (the money you put in directly), you can withdraw these at any time without taxes or penalties, regardless of your age or how long the account has been open. This is one of the key benefits of Roth IRAs. The 5-year rule applies to: 1) Earnings on your contributions (which must stay in for 5 years AND you must be 59½ to avoid penalties), and 2) Converted funds from a Traditional IRA to a Roth IRA (these have their own 5-year waiting period). Your 1099-R form may not be properly coded to show that you were withdrawing contributions rather than earnings. Ask your tax professional to look at your total contribution history to verify you were only withdrawing original contributions, not any earnings. If you've contributed $24k total and only withdrew $8k, those should clearly be contributions and therefore not taxable.

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Andre Laurent

•8M

The 5-year rule for contributions doesn't exist - you can withdraw contributions anytime tax and penalty free, regardless of when you made them. This is true whether you contributed yesterday or 10 years ago. For earnings, the 5-year rule starts when you first open and fund your Roth IRA. This is a single clock that starts with your first contribution. It doesn't restart with each new contribution. If you opened and contributed to a Roth IRA in 2022, your 5-year period for earnings would end in 2027.

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Liam Mendez

•8M

I had this same confusion last year and discovered a tool that saved me thousands in potential mistaken tax payments. I used taxr.ai (https://taxr.ai) to analyze my 1099-R and contribution history, and it immediately identified that my withdrawal was from contributions only, not earnings, meaning it was 100% tax and penalty free. The system analyzed all my past contribution records alongside the 1099-R and generated documentation showing exactly where the withdrawn money came from. My tax preparer was initially confused by the distribution code on the 1099-R too, but the detailed analysis from taxr.ai helped clarify everything. They even provide specific tax code references that explain why contribution withdrawals are exempt.

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Liam Mendez

•8M

Yes, it works with all major brokerages including Vanguard. It can import statements directly or you can upload PDFs of your statements. I had Fidelity and it handled everything perfectly. The system uses sophisticated tracking to differentiate between contributions and earnings. It analyzes your contribution history across all years by examining your previous tax documents and account statements. This gives you a clear breakdown of your contribution basis versus earnings, even if your brokerage's reporting is unclear. It's particularly helpful with older accounts where this information might not be readily available from your current provider.

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Jacob Smithson

•8M

Just wanted to follow up - I tried taxr.ai after posting here and it was actually really helpful. I've had my Roth IRA since 2018 and took out $5k last December. My accountant was also saying I might owe taxes, but after uploading my statements, the tool showed that my withdrawal was 100% from contributions and therefore not taxable. The report broke down all my contributions year by year and tracked which portions were withdrawn. The best part was the tax code references that specifically showed why this money wasn't taxable. I forwarded everything to my accountant and he agreed it was correct. Definitely recommend for anyone dealing with this Roth IRA confusion!

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Isabella Brown

•8M

If you're still having trouble getting your tax preparer to understand, you should try calling the IRS directly to get an official ruling. I had a similar issue last year and needed to speak with an IRS agent to resolve it. After 3 hours of being on hold and multiple disconnections, I discovered Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in less than 20 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - but basically they use technology to navigate the IRS phone system and hold in line for you, then call you once an agent is ready. The IRS agent I spoke with confirmed that Roth IRA contributions can be withdrawn tax-free at any time, and explained exactly how to report it on my return.

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Isabella Brown

•8M

The service works by using automated technology to navigate the IRS phone system and wait in the queue for you. When an agent is about to answer, you get a call connecting you directly. The IRS has no idea you used a service - to them, it's just a regular call once you're connected. Regarding security, they don't access or store any of your tax information. They simply make the initial call to the IRS and wait in line, then connect you directly. You only share your tax details once you're speaking directly with the IRS agent. I was skeptical too, but after waiting 3+ hours multiple times and getting disconnected, this was literally the only way I could reach someone.

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Aiden Rodríguez

•8M

I need to eat my words. After posting that skeptical reply yesterday, I decided to try Claimyr because I've been trying to reach the IRS for weeks about a similar Roth issue. Got connected to an agent in 17 minutes! The agent confirmed exactly what others here are saying - Roth IRA contributions can be withdrawn anytime without taxes or penalties. The 5-year rule only applies to earnings. The agent explained that the distribution code on the 1099-R often doesn't distinguish between contributions and earnings, which is why tax preparers get confused. They advised me to file Form 8606 with my return to properly document that I was withdrawing contributions. Problem solved after weeks of stress and confusion. Would never have gotten this resolved without actually speaking to someone.

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Emma Garcia

•8M

I'm surprised your tax person doesn't know this. It's Roth IRA 101. You absolutely CAN withdraw your contributions (not earnings) at any time without penalty or tax. That's one of the main benefits of a Roth IRA vs Traditional! The issue is probably that your 1099-R doesn't specify whether it's contributions or earnings being withdrawn. The IRS assumes it's proportional unless you document otherwise. Make sure you file Form 8606 with your taxes to properly indicate these were contribution withdrawals.

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Emma Garcia

•8M

Form 8606 is used to report nondeductible contributions to traditional IRAs and distributions from Roth IRAs. Most tax software should prompt for it when you enter a 1099-R for a Roth distribution, but sometimes you need to specifically look for it or indicate you want to file it. It's important because it helps track your "basis" (the amount you've contributed) in your IRAs, which determines the taxable portion of future distributions. For Roth withdrawals, it helps document that you're taking out contributions (not taxable) rather than earnings (potentially taxable). If your software doesn't automatically include it, you can usually find it in a forms search and add it manually.

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Ethan Anderson

•8M

Quick tip for the future - keep meticulous records of all your Roth IRA contributions by year! I've been doing this in a simple spreadsheet since I opened mine in 2010. Makes it super easy to prove to the IRS that withdrawals are from contributions. My brokerage's year-end statements don't clearly track cumulative contributions vs. earnings, so having my own records has saved me several times. Just note the date, amount, and tax year for each contribution. Takes 30 seconds each time but saves major headaches later.

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