Sentences with phrase «early distribution penalty when»

You may want to note that the special five - year period in which you can incur a 10 % early distribution penalty when withdrawing converted amounts will apply to these accounts just as they apply when converting to a Roth IRA.

Not exact matches

If you expect to withdraw earnings when they're taxable, you're generally better off with a taxable account — especially if you're investing for long - term capital gains, or if the 10 % early distribution penalty will apply.

If you receive a distribution from an IRA when you are under age 59 1/2, you will have to pay the 10 % IRS penalty tax on early distributions, unless an exception applies.

As a result, when I made a $ 40,000 early withdrawal from my 401K to satisfy the equity payment, listed on my 1099 - R as a total distribution, I incurred the extra tax penalty.

What's more, if you are under the age of 59 1/2 when the distribution occurs, you may be assessed an additional 10 % early - distribution penalty on any taxable amount.

While an early - distribution penalty does apply when using an IRA to pay student loans, there is no penalty when IRA distributions are used to pay for current educational expenses.

But what insurance agents really mean when they make this point is if you put money in a tax - advantaged retirement plan like a 401 (k) and want to take it out for a purpose other than retirement, you might have to pay a 10 % early distribution penalty plus the income tax that's due.