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We will make a guess that this is a question about the qualified distributions and nonqualified distributions from a ROTH IRA account. Age 59 1/2 also will be a factor that will apply to the 10% early withdrawal penalty.
The below information is available by going to the IRS gov website and using the search box for Publication 590 (2009), Individual Retirement Arrangements and go to chapter 2
Are Distributions Taxable?
You do not include in your gross income qualified distributions or distributions that are a return of your regular contributions from your Roth Ira's. You also do not include distributions from your Roth IRA that you roll over tax free into another Roth IRA. You may have to include part of other distributions in your income. See Ordering Rules for Distributions , later.
Is Roth Distributions a Qualified Distribution?
Additional Tax on Early Distributions
If you receive a distribution that is not a qualified distribution, you may have to pay the 10% additional tax on early distributions as explained in the following paragraphs.
Distributions of conversion and certain rollover contributions within 5-year period. If, within the 5-year period starting with the first day of your tax year in which you convert an amount from a traditional IRA or rollover an amount from a qualified retirement plan to a Roth IRA, you take a distribution from a Roth IRA, you may have to pay the 10% additional tax on early distributions. You generally must pay the 10% additional tax on any amount attributable to the part of the amount converted or rolled over (the conversion or rollover contribution) that you had to include in income. A separate 5-year period applies to each conversion and rollover. See Ordering Rules for Distributions , later, to determine the amount, if any, of the distribution that is attributable to the part of the conversion or rollover contribution that you had to include in income.
Ordering Rules for Distributions
If you receive a distribution from your Roth IRA that is not a qualified distribution, part of it may be taxable. There is a set order in which contributions (including conversion contributions and rollover contributions from qualified retirement plans) and earnings are considered to be distributed from your Roth IRA.
What else can I help you with?
Do you pay federal income tax on Roth IRA income if withdrawn at age 50?
Yes when you take non qualified distributions. If you receive a distribution that is not a qualified distribution, you may have to pay the 10% additional tax on early distributions under the age of 59 1/2. You do not include in your gross income qualified distributions or distributions that are a return of your regular contributions from your Roth IRA(s). IRS Publication 590 has the details available. about this.
What is capital withdrawal?
This is nothing but the capital withdrawn which is distributions/dividends.
Is there a a problem using a 401 k for a down payment on a house?
Everything in life is a problem! Understand that presuming it is a first time purchase and qualifies, all it qualifies for is to NOT have the extra surcharge or penalty for withdrawal. It is still income when withdrawn, so you have to take out much more than your down payment. It could certainly be enough income to move you to a higher bracket that year. The retirement savings, and the ability to have tax deferred savings with that earnings, are essentially lost. To discourage the use of pension funds for purposes other than normal retirement, the law imposes an additional 10% tax on certain early distributions of these funds. Early distributions are those you receive from a qualified retirement plan or deferred annuity contract before reaching age 59 1/2. The term "qualified retirement plan" means: * A qualified employee plan such as a 401(k) plan, * A qualified employee annuity plan, * A tax-sheltered annuity plan for employees of public schools or tax-exempt organizations, * An IRA other than an education IRA, or * If you have an early distribution from a SIMPLE IRA plan within the first 2 years of participation in the plan, the additional tax is 25%. Distributions that are not taxable such as distributions that you roll over to another qualified retirement plan are not subject to this 10% tax. For more information on rollovers, refer to Topic 413. There are certain exceptions to this penalty. The following five exceptions apply to distributions from any qualified retirement plan: # Distributions made to your beneficiary or estate on or after your death. # Distributions made because you are totally and permanently disabled. # Distributions made as part of a series of substantially equal periodic payments over the life expectancy of the owner or life expectancies of the owner and the beneficiary. If these distributions are from a qualified plan other than an IRA, you must separate from service with this employer before the payments begin for this exception to apply. # Distributions that are equal to or less than your deductible medical expenses, that is, the amount of your medical expenses that is more than 7.5% of your adjusted gross income. You do not have to itemize to meet this exception. For more information on medical expenses, refer to Topic 502. # Distributions made due to an IRS levy of the plan. The following additional exceptions apply only to distributions from a qualified retirement plan other than an IRA: # Distributions made to you after you separated from service with your employer, if the separation occurred in or after the year you reached age 55, # Distributions made to an alternate payee under a qualified domestic relations order, and # Distributions of dividends from employee stock ownership plans. The following exceptions apply only to distributions from IRAs: # Distributions equal to or less than your qualified higher education expenses, # Distributions made to pay for a first-time home purchase, and # Distributions made to pay health insurance premiums if you are unemployed. Refer to Topic 557 for information on the tax on early distributions from IRAs. For more information, refer to Publication 575, Pension and Annuity Income. The 10% tax is reported on the appropriate line of Form 1040 (PDF) . You must also file Form 5329 (PDF),Additional Taxes on Qualified Plans (Including IRA's) and other Tax-Favored Accounts if: # Your distribution is subject to the tax, and distribution code "1" is not shown in the appropriate box of Form 1099-R (PDF), or # One of the exceptions applies but the box labeled "Distribution Code(s)" does not show a distribution code of "2", "3", or "4". On the other hand, you do not need to file Form 5329 if your distribution is subject to the tax and a distribution code of "1" shows in the appropriate box. In this case enter the 10% tax on the appropriate line of Form 1040 and write "no" on the dotted line next to the appropriate line. Distributions from a qualified retirement plan are subject to federal income tax withholding; however, if your distribution is subject to the 10% additional tax, your withholding may not be enough. You may have to make estimated tax payments
How old does a person have to be to start withdrawing from their IRA?
With an IRA one can make qualified withdrawals from the age of 59.5 years. However, one must start taking withdrawals that are classified "required minimum distributions" from 70.5 years of age, the amount to be withdrawn depends on how much has been put into the account.
What is the penalty for not taking the required minimum distribution from a retirement account?
The penalty for not taking the required minimum distribution from a retirement account is typically a 50 tax on the amount that should have been withdrawn.
Is money left to you as beneficiary on a pension taxed?
Distributions will be subject to income tax to the same extent they would be if the deceased had taken them. Roth IRA distributions will be tax-free even if the deceased did not live to age 59 1/2 (except for earnings withdrawn before the fifth year of the Roth IRA).
What is the tax rate on a 401k withdrawn?
The Federal ordinary income tax rate on the 401k funds withdrawn depend on the tax rate of the individual drawing the funds. Early withdrawals (distributions before the age of 59.5) are generally struck with an additional 10% penalty on top of the federal and state income taxes due by the individual.
What is the tax treatment of a non qualified annuity?
Please clarify what country you are talking about. Different countries have different tax laws. Taxation rules for a nonqualified annuity owned by individuals subject to United States tax jurisdiction are contained in Internal Revenue Service Publication 17. A nonqualified annuity is funded with after tax dollars and accordingly the tax basis for all contributions is zero. Any contract gains made above the tax basis are generally taxed at ordinary income tax rates. The primary advantage of a nonqualified annuity is the benefit of allowing savings to grow on a tax deferred basis. In an ordinary savings or stock account all realized capital gains, dividends, and interest are taxed on a yearly basis. In a nonqualfied annuity account gains can compound tax free over time until funds are withdrawn. Different tax rules apply depending on whether the annuity holder takes a withdrawal or an annuitization payment. When a withdrawal is made from a nonqualified annuity gains are considered to be distributed first and will be fully taxable. For example, an individual holding a nonqualified annuity with an account balance of $200,000 consisting of $150,000 of after tax contributions and $50,000 in gains would owe ordinary income tax on $50,000 of a $70,000 withdrawal. The remaining $20,000 would be tax free since it represents part of the cost basis comprised of after tax contributions. When an owner of a nonqualfied annuity chooses to receive annuity payments each year part of the payment will be comprised of a tax-free return of his basis and part taxable gain. The rules can become very complex and exceptions to the general rule cited above exist for contracts issued prior to August 14, 1982. In addition to possible taxation of withdrawals a penalty tax of 10% is assessed on money withdrawn before the age of 59 1/2. If the account owner dies with gains in the nonqualified annuity the beneficiary will inherit the tax basis of the decedent and owe ordinary income taxes on the distribution of any gains.
Can a witness statement be withdrawn?
More information is needed before an answer can be given. Withdrawn WHEN? Withdrawn by WHO? Withdrawn WHY?
What happen after 240 US Marines were killed in Lebanon?
US Marines were withdrawn from Lebanon.The marines were withdrawn from Lebanon A+ answerThe Marines were withdrawn from Lebanon
What happens if you withdraw your IRA between age 59.5 to age 70.5?
If you withdraw from your IRA between ages 59.5 and 70.5, there are no penalties for early withdrawal. However, you will still need to pay income taxes on the withdrawn amount. Once you reach age 70.5, you will be required to start taking minimum distributions from your traditional IRA.
How do you spell withdrawn?
That is the correct spelling if "withdrawn" (taken out, or shy).
