The 60-Day Rule

• Money that you withdraw from your IRA may be re-deposited within 60 days of the withdrawal without taxes or penalties. Normally, the IRA trustee will withhold 20 percent of the withdrawn amount to pay any money due. You can opt out of the withholding, but you might have to make estimated income tax payments depending on your tax situation. You may only withdraw and replace money once during a 12-month period.
  
  

Short-Term Loans

• The law allowing you to withdraw money from an IRA and repay it within 60 days is intended to allow you to withdraw money and roll it into another retirement account. This law is not designed to provide interest-free short-term loans. If you do not redeposit the money on time, if you miss the 60-day window by just one day, you may have created a taxable event depending on the type of IRA you have. Your withdrawal from a traditional IRA would be subject to income taxes, and the 10 percent early withdrawal penalty at that time.
  
  

Roth IRA

• You can always withdraw your contributions to a Roth IRA tax-free, since Roth IRAs are funded with after-tax money. With a Roth, there is also no tax penalty for these withdrawals as well. If you withdraw the gain on your investment in a Roth, you will pay taxes and penalties on the amount that you withdrew. With a Roth, you have 60 days to replace the money that you withdraw and not have it count against the current year's contributions or be assessed a penalty if you are repaying Roth gains.
  
  

Other Permitted Withdrawals

• You can withdraw up to $10,000 form an IRA account penalty free for the purchase of a home when you haven't had ownership interest in your primary residence for two years or more. All Roth contributions may be withdrawn tax- and penalty-free, but you can also use this exemption to withdraw the gains on a Roth penalty-free. Any withdrawal from a traditional IRA or Roth earnings that you withdraw are subject to income tax. You may also withdraw from an IRA to fund a college education for a family member using the same guidelines. These withdrawals are also able to be repaid within 60 days without taxes.