| Withdrawal
penalties |
| Traditional
IRA |
10% penalty tax if you're under age 59½ and the withdrawal does not qualify as an
exception to the tax (described below). |
| Roth IRA |
For accounts held less than five years and the owner is under age 59½:
Distributions from contributions are
tax-free and penalty-free.
10% penalty tax may apply on distributions from the converted assets if they do not qualify as an exception
The
10% penalty tax may apply on distributions of earnings if they do not qualify as an exception. |
Early withdrawal penalty tax
You will pay a 10% penalty on a premature withdrawal
unless your distribution qualifies as an exception to the penalty. The penalty will not apply if the distribution is used for:
- A first-time home purchase (lifetime maximum is $10,000).
- Postsecondary education
expenses.
- Substantially equal periodic payments taken under IRS guidelines.
- Medical expenses
exceeding 7.5% of your adjusted gross income.
- An IRS levy on the IRA.
- Health insurance premiums
(after you have received at least 12 consecutive weeks of unemployment compensation).
- Disability.
- Death
|
