The Rules Of The 10% Penalty Fee From Taking Early Distribution. Has This Happened To You?

Generally, if you are under age 59 1/2, you must pay the 10% additional tax on the distribution of any assets (money or property) from your traditional IRA, distributions before you are age 59 1/2 are called early distributions. The 10% additional tax applies to the part of the distributions that you have to include in gross income. It is in addition to any regular income tax on the amount.

After 59 1/2 and before age 70 1/2 After you reach age 59 1/2 you can receive distributions after you reach age 59 1/2 , distributions are not required until you reach age 70 1/2. There are several exceptions to the age 59 1/2 rule. Even if you receive distribution before you are age 59 1/2, you may not have to pay the 10 % additional tax if you are in one of the following situations:



* You have un-reimbursed medical expenses that are more than 7.5 % of your adjusted gross income

*The distributions are not more than the cost of your medical insurance
*You are disabled
*You are the beneficiary of the deceased IRA owner
*You are receiving distributions in the form of an annuity
*The distributions are not more than your qualified plan
*The distribution is due to an IRS buy of the qualified plan
*The distribution is due to ab IRS levy of the qualified plan
*The distribution is a qualified reservist distribution

If you have withdrew from an IRA that will consequently cause potential tax liability, call a professional tax consultant today for help beyond your expertise.