What are the penalties for withdrawing early from an IRA?

Answer 1

You can withdraw (also called "distribute") money from your IRA penalty-free after you reach age 59 and a half. At that time, you will owe ordinary income tax on monies distributed from a Traditional or Rollover IRA. Monies distributed from a Roth IRA are income tax free, because you paid income tax on the contribution to the Roth IRA in the year it was earned.

Funds distributed from any type of IRA before you reach age 59 and a half are subject to a 10% penalty, plus funds distributed from a Traditional or Rollover IRA are always subject to ordinary income tax treatment.

Exceptions to this rule include distributions for things like qualified medical expenses (subject to an income threshold), purchasing your first home, and in the event that you have become disabled. I recommend strongly that you review the IRS website for current rules about distributions and exceptions to the penalty.

http://www.irs.gov/publications/p590/ch01.html

You might also consult with a tax preparer.

Another thing to note is that you can distribute contributions from your Roth IRA without paying a penalty or income tax, since you have already paid income tax on that money. If you distribute earnings (amounts you have earned by investing) from a Roth, you will owe the 10% penalty.

Answer 2

There is no tax penalty for early withdrawal from a Roth IRA, because you already paid tax on your contributions. However, you need to pay income tax on any amount you withdraw that exceeds your initial contributions (e.g. interest or dividends).

Answer 3

The early withdrawal penalty under the age of 59 1/2 is 10% plus any income tax that may be due at your marginal tax rate on the taxable amount of the distribution.

You must include early distributions of taxable amounts from your traditional IRA in your gross income. Early distributions are also subject to an additional 10% tax, as discussed later.

Go to the IRS gov web site and use the search boxes for PUBLICATION 590 go to

Early Distributions

Early distributions defined. Early distributions generally are amounts distributed from your traditional IRA account or annuity before you are age 59½, or amounts you receive when you cash in retirement bonds before you are age 59½.

Age 59 1/2 Rule

Generally, if you are under age 59½, you must pay a 10% additional tax on the distribution of any assets (money or other property) from your traditional IRA. Distributions before you are age 59½ are called early distributions.

The 10% additional tax applies to the part of the distribution that you have to include in gross income. It is in addition to any regular income tax on that amount.

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Answer 4

10% and then 10% taxes

Answer 5

at what age can i withdraw my money from a roth

Answer 6

No, you would not have to pay an early withdrawal penalty. You can start drawing from an IRA without penalty at age 59 1/2.

Answer 7

Unless you meet special rules, there is a 10% penalty for early withdrawal from an IRA. You also pay income tax on the amount of the early withdrawal.

Answer 8

In a Roth IRA you pay full taxes on the money you put in the IRA, but in other types, you pay money whenever you withdraw the money from your account.