Individual Retirement Accounts » Traditional Rollover or Contributory IRAs

Distributions from an IRA

The Internal Revenue Service (IRS) allows earnings in a Traditional IRA to grow tax deferred until such time they are withdrawn.

If an individual takes a distribution from a Traditional IRA and one of the following conditions apply, only ordinary federal income taxes apply:

1. Age 59-1/2
2. Death
3. Disability
4. Certain Medical Expenses
5. Health Insurance Premiums for unemployed individual
6. Higher Education Expenses
7. First Time Home Purchase
8. Substantially Equal Periodic Payments
9. IRS Tax Levy

Otherwise, if the above conditions are not met, the individual taking the distribution may be responsible for an additional 10% penalty for early withdrawal.

All of these distributions are defined under IRC Section 72(t).

State tax laws vary. Account owners should check with their tax professionals regarding state tax issues.