IRA Distribution Penalties

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IRA distribution penalties for withdrawing IRA funds before the proper age include having the amount withdrawn counted toward taxable income and a 10 percent tax on top of that. Contact the IRS or the financial institution that holds that IRA before withdrawing any funds with advice from a certified public accountant and personal financial planner in this free video on retirement savings.

Part of the Video Series: Tax Law, Real Estate & Credit Tips
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Video Transcript

My name's Miranda Chook, a CPA. This segment is about IRA distribution penalties. Now if you withdraw amounts from your IRA account before age 59 and a half, there are a couple of penalties that you may be subject to. First off the amount that you have withdrawn will be counted towards taxable income in that year. On top of that, there may be a 10% tax as well. Now there are exceptions to the 10% tax but the withdraw itself will still be subject to being included as part of your taxable income. So for more information contact the IRS or the bank where you have your IRA account.

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