How Do You Calculate Taxes Owed On Early Withdrawal From An IRA?
Though an IRA, or individual retirement account, is typically money set aside for retirement, there are often unavoidable situations in life that make it necessary to withdraw funds early. Unfortunately, an early withdrawal from your IRA can make you subject to some significant penalties and taxes that you must calculate on your next tax return. Confirm that you actually will owe taxes on your early withdrawal. There are situations in which you can withdraw money from your IRA without penalty. For example, withdrawals made before the year of required minimum distribution but after you turn 59 1/2 are not subject to tax penalties. Know the cases in which you will not need to calculate the penalty taxes on an early withdrawal from your IRA. You will not be assessed the 10 percent tax if you were disabled, rolled the funds over to a new account (either directly or via lump sum), used the funds to pay for health insurance while you were unemployed, paid your college tuition (or that of a d
