How to Avoid the Early Withdrawal Penalty on IRA Distributions

Individual Retirement Accounts (IRAs) are intended to be used as a savings and investment vehicle for retirement. And while it is not uncommon for workers to have a need to tap into this account prior to retirement, if you withdraw funds from your IRA before you reach age 59½, you could owe the IRS a 10% early distribution tax on top of the regular income taxes associated with a distribution from a traditional IRA.

There are, however, a few exceptions to the additional 10% tax. In this episode of Malcolm on Money Office Hours, Malcolm discusses the exceptions to the IRS’s 10% penalty on early withdrawals from IRAs, and shares how to go about claiming such an exception on your tax return.

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Malcolm Ethridge, CFP® is an Executive Vice President and fiduciary Financial Advisor with CIC Wealth Management, based in the Washington, DC area. He is also the Managing Partner of Capital Area Tax Consultants. 

Malcolm’s areas of expertise include retirement planning, investment portfolio development, tax planning, insurance, equity compensation and other executive benefits. 

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Disclosures:

CIC Wealth, LLC does not provide legal or tax advice. Be sure to consult with your tax and legal advisors before taking any action that could have tax consequences.

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