Will A Distribution From My Traditional IRA Be Penalty Free?

Categories: Removing money from a qualified plan, Traditional IRA

Some clients may have unique circumstances that result in a possible impact on 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?” This flowchart helps to quickly identify unique situations that could have an impact on how a distribution is taxed (and penalized):

  • Implications for IRAs with nondeductible IRA contributions
  • Conditions that trigger the 10% early distribution penalty.
  • Situations that avoid the 10% early distribution penalty

Updated for 2018