Jamie is 42 years old and received a $20,000 distribution for his roth ira established in 2009. at the time of distribution, the roth ira account totaled 33,748: $18,000 regular contributions, $10,000 taxable conversion contributions made in 2014, and 5,748 earnings. how much of his distribution is taxable and subject to the early distribution penalty?

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Ethan Lopez

19 January, 10:19

Jamie is 42 years old and received a $20,000 distribution for his roth ira established in 2009. at the time of distribution, the roth ira account totaled 33,748: $18,000 regular contributions, $10,000 taxable conversion contributions made in 2014, and 5,748 earnings. how much of his distribution is taxable and subject to the early distribution penalty?

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Irvin Lutz · Answer 1

The rules for the Roth early distribution are as follows : Unless an exception applies, most distributions from a Roth IRA before the owner reaches age 59 1/2 will be subject to an "early withdrawal penalty" of 10% on the amount of the distribution. This is IF a person has kept the amount in the account for his required five year tax period rule. If this condition has been met, the total penalty would be $ 2000.00