Pensions, Annuities, and Individual Retirement Accounts (IRAs) Distributions

Penalties for Early Distributions

In general, if the taxpayer receives a distribution (before age 59½, including an involuntary cash-out) from a traditional IRA, Roth IRA, or other qualified retirement plans, or a modified endowment contract, the taxable part of the distribution is subject to an additional 10% penalty.  Early distributions from a SIMPLE IRA within two years of first participation in an employee plan are subject to a 25% instead of a 10% early distribution penalty.  There are, however, exceptions to the early distribution penalty.


Cathy Fisher

Common Cents Bookkeeping and Tax Preparation

Serving Henderson, NC, Buncombe County, Polk County, Transylvania County


P: 828-595-2835

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