Tax Question
I need help with my tax. It is a very simple question but when I go to look up the answer, I am taken to various publications and instructions.
Back in 1992 I put $500 into a Roth IRA. Last year I cashed it out at $806. Ok, so it says on my bank statement that $806 is subject to interest even though the original $500 was my own money, already taxed. Is that correct or is only the $306 subject to income taxes.
Also, I know I need to pay a 10% penalty most likely on it, but again, I don't know whether the penalty applies to the entire $806 or just on the money I made on it, $306. I've tried looking up the answer on the publications and forms I get sent to but there are so many rules about Roth IRAs and there is every other kind of retirement information in the mix too that is extremely confusing. They give so many examples of this and that except for something simple.
I just need to know the two pieces of information I listed above and extra credit if you can tell me the forms I need to file and stuff. So far I see Pub. 8606 and 5329 but they don't seem to really apply to a simple situation.
Back in 1992 I put $500 into a Roth IRA. Last year I cashed it out at $806. Ok, so it says on my bank statement that $806 is subject to interest even though the original $500 was my own money, already taxed. Is that correct or is only the $306 subject to income taxes.
Also, I know I need to pay a 10% penalty most likely on it, but again, I don't know whether the penalty applies to the entire $806 or just on the money I made on it, $306. I've tried looking up the answer on the publications and forms I get sent to but there are so many rules about Roth IRAs and there is every other kind of retirement information in the mix too that is extremely confusing. They give so many examples of this and that except for something simple.
I just need to know the two pieces of information I listed above and extra credit if you can tell me the forms I need to file and stuff. So far I see Pub. 8606 and 5329 but they don't seem to really apply to a simple situation.