Why is my withdrawal from my Roth being partially taxed? It has been in the Roth for several years,
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1 Best answer
IreneS
Intuit Alumni
Jun 1, 2019 11:50:02 AM
Has your Roth been established for 5 years? Your Roth IRA withdrawals may be taxable if:
You’ve
not met the 5-year rule for opening the Roth and you are under
age 59 1/2. You will
pay income taxes and a 10% penalty tax on earnings that you withdraw. The
10% penalty may be waived if you meet one of the exceptions to the
early withdrawal penalty tax.
You’ve
not met the 5-year rule but you are over age 59 1/2: Earnings
withdrawn will be included as income and subject to income taxes but
will not be subject to a 10% penalty tax.
You’ve
met the 5-year rule but are not yet 59 1/2: Earnings
withdrawn will be considered as income and subject to income taxes
and a 10% penalty tax. The 10% penalty may be waived if you meet one of
the exceptions listed on page 64 of IRS Publication 590-B -
Distributions from Individual Retirement Arrangements
2 Replies
IreneS
Intuit Alumni
Jun 1, 2019 11:50:02 AM
Has your Roth been established for 5 years? Your Roth IRA withdrawals may be taxable if:
You’ve
not met the 5-year rule for opening the Roth and you are under
age 59 1/2. You will
pay income taxes and a 10% penalty tax on earnings that you withdraw. The
10% penalty may be waived if you meet one of the exceptions to the
early withdrawal penalty tax.
You’ve
not met the 5-year rule but you are over age 59 1/2: Earnings
withdrawn will be included as income and subject to income taxes but
will not be subject to a 10% penalty tax.
You’ve
met the 5-year rule but are not yet 59 1/2: Earnings
withdrawn will be considered as income and subject to income taxes
and a 10% penalty tax. The 10% penalty may be waived if you meet one of
the exceptions listed on page 64 of IRS Publication 590-B -
Distributions from Individual Retirement Arrangements
dmertz
Level 15
Jun 1, 2019 11:50:03 AM
The last bullet should generally just say "You are not yet 59½." Meeting the 5-year rule for qualified distributions is irrelevant for anyone under age 59½ unless that person is disabled, deceased, or is using the money for a first-home purchase.