Will A Distribution From My Traditional IRA Be Penalty Free?
Some people may have unique circumstances that could impact the taxes (and penalties) that must be paid if a distribution is taken from their traditional IRA. The exceptions to the usual distribution rules can be hard to remember especially since many exceptions rarely come up.
To help make this easier, we have created the “Will A Distribution From My Traditional IRA Be Penalty-Free?” flowchart. This flowchart helps to quickly identify unique situations that affect whether a distribution is taxed and penalized, and considers the following:
Implications for IRAs with nondeductible IRA contributions
Conditions that trigger the 10% early distribution penalty
Exceptions to the 10% early distribution penalty
Robert J. Pyle, CFP®, CFA, AEP® founded Diversified Asset Management, Inc., in 1996 to provide personalized, comprehensive wealth management services to successful individuals, families, single women, and business owners. His specialty is addressing the complex financial needs of self-employed professionals, corporate executives, and small-business owners. Our disclosure can be found here. The views, opinion, information, and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc. Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting, or tax advice.