IRA distributions

• Income tax will apply to distributions that you have to include in gross income.
• You may owe a 10% additional tax on early or pre-59½ taxable distributions.
  • The exceptions to the 10% additional tax include distributions after reaching age 59½, death, disability, eligible medical expenses, certain unemployed individuals’ health insurance premiums, qualified first-time homebuyer ($10,000 lifetime maximum), qualified higher education expenses, Substantially Equal Periodic Payments (SEPP), Roth conversion, qualified reservist distribution, birth or adoption expenses (up to $5,000), or IRS levy.
    Source: irs.gov. Wells Fargo Advisors has provided this link for your convenience but does not control or endorse the website and is not responsible for the products, services, content, links, privacy policy, or security policy of this website.

Required Minimum Distributions (RMDs) for Traditional, SEP, and SIMPLE IRAs begin by your Required Beginning Date (RBD), which is generally April 1 following the year you turn age 73.

Traditional IRA distributions are taxed as ordinary income. Qualified Roth IRA distributions are federally tax-free provided it has been more than five years since the Roth IRA was funded AND the owner is at least age 59 ½ or disabled, or using the first-time homebuyer exception, or taken by their beneficiaries due to their death. Qualified Roth IRA distributions are not subject to state and local taxation in most states. Distributions from Traditional and Roth IRAs may be subject to an IRS 10% additional tax if distributions are taken prior to age 59 ½.

Wells Fargo & Company and its affiliates do not provide tax or legal advice. This communication cannot be relied upon to avoid tax penalties. Please consult your tax and legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your tax return is filed.