Is there any penalty for taking a distribution from a Roth IRA before age 59.5 if the IRA is 5 years old & ...

Question

The distribution totals less than the contribution. Does the 10% penalty apply because I am not yet 59.5? Also, is there any other tax liabilty, aside from the possible 10% penalty, that I may be subject to for an early distribution?

Answer 1

As long as you distribution does not exceed the contribution that you made there is no penalty or tax due on the funds withdrawn

Pub 590

Answer 2

As long as none of the Roth IRA was converted from a traditional IRA, your distribution as described is nontaxable.

If some of the Roth IRA money came from a traditional IRA less than five years ago, you may be subject to a 10% penalty on that amount of the distribution even though the Roth IRA is five years old. You will already have paid tax on the conversion amount.

See Pub 590, page 60.
http://www.irs.gov/pub/irs-pdf/p590.pdf

Answer 3

there have been 2 5 year guidelines. the first became from the date of starting off the Roth. the second one became from the date of the conversion from a common ira. So in case you substitute different circumstances, each and each conversion has it really is own 5 year clock earlier the ten% distribution penalty expires. (The penalty expires once you attain fifty 9.5 years of age too.) that is an similar 10% penalty you would have paid in case you had taken the money immediately from the classic IRA. until eventually you meet an exception it applies.

Answer 4

In general, whenever you withdraw money from an IRA before you are 59.5, there will be a 10% penalty. This applies whether it is a Roth or a traditional IRA. However, there are a number of exceptions to the penalty. For a complete list, get Form 5329 and the instructions from the IRS website.

Even if there is no penalty on your withdrawal, you will pay income tax on it.

Answer 5

Shouldn't be any penalty. Roth IRAs are made up of post tax contributions. In other words, you have already paid the tax on that money.

Now watch out for the company who is holding the IRA, they may want to charge you or penalize you for the withdraw.

Answer 6

Is life realy that tough. Are you actually finantualy that bad off.
You can most likely get the money but you will loose a lot because id=f you hafe been paying for some years there is a gain on the money and that you will loose.

I started in the fiftys putting money away for retirement an fourty years later I did retire and now have received nearly twice as much as I put in to the plan. Every month is just that much more for me.

Answer 7

You can always take out your contribution without tax or penalty.

Answer 8

hi where live you?and i dont understandi likte