Will A Distribution From My Roth IRA Be Tax and Penalty Free?

Some clients may have unique circumstances that could result in a distribution from a Roth IRA being taxed or penalized. Many of these situations rarely come up, which makes it hard to remember the usual distribution rules from a Roth IRA.

To help make this easier, we have created the “What Are The Tax Issues Of Taking Distributions From My Roth IRA?” This flowchart helps to quickly identify unique situations that could have an impact on how a distribution is taxed (and penalized):

  • 5 year rule considerations
  • Impact of Roth Conversions
  • Distribution ordering rules
  • Conditions that trigger the 10% early distribution penalty
  • Situations that avoid the 10% early distribution penalty

Updated for 2020 (Includes changes due to The SECURE Act)