2007-02-26 15:24:55 · 3 answers · asked by krystee j 1 in Business & Finance ➔ Personal Finance
If you are under age 59.5, the penalty is 10% of the withdrawal. As with all withdrawals, the amount will also be taxed as ordinary income.
If the purpose of your withdrawal is to retire early, IRS code 72(t) allows you to withdraw a stream of income in "substantially equal payments" without penalty. Most financial advisors will be able to help you with the calculation at no charge.
2007-02-26 15:29:06 · answer #1 · answered by Rob D 5 · 0⤊ 0⤋
It depends on what the withdrawl is for. I made a withdrawl to pay for my first house. I don't have to pay the penalty on the $10,000 but I still owe taxes. Go to the IRS website and they will give you an explanation of what exemptions there are from the 10% penalty. Either way, you still owe taxes depending on your tax bracket and the amount that you withdraw could put you into another tax bracket if it is substantial.
2007-02-26 15:42:19 · answer #2 · answered by CPA Diva 2 · 0⤊ 0⤋
I think there is a 20% penalty and then the money is taxed as well.
2007-02-26 15:28:14 · answer #3 · answered by HoustonTexan 3 · 0⤊ 0⤋