Zakat On Pre-tax IRA Account
You received a distribution of $1000 from your IRA account, the zakat due on this is $100 ( assuming that it is above Nisab because amount of production/earning/wealth below Nisab is exempt from Zakat ). You paid $150 in government taxes. Now come year-end ( which is one date in the year fixed by you for calculation of Zakat on wealth ), your Zakat on wealth comes out to be $200. You paid other government taxes of $200 throughout the year. Your gross Zakat obligation = 100+200 = $300 Total paid in taxes= 150+200 = $350 Net Zakat obligation = 300-350 = negative $50 In this scenario, you have paid more in taxes than your zakat obligation, hence you are not required to pay any Zakat this year. You can carry forward this $50 of more taxes paid this year for adjustment against Zakat obligation of next year.