If you take money out of any tax-deferred retirement account, such as 401(k), or IRA, before age 59-1/2, the distribution will be subject to an additional 10% penalty tax on the amount withdrawn. This video describes how the penalty works, and tells you under what circumstances you can get an exception to the penalty.
For more information on IRA distributions, click here:
For more information on 401(k) plans, click here:
To learn more about what is on your 1099-R Form, click here:
Additional resources and information:
IRS Publication 590-B “Distributions from Individual Retirement Arrangements”:
IRS Form 1099R: “Distributions from Retirement Plans”:
IRS Form 5239: “Additional Taxes on Qualified Plans”:
IRS Form 8915-F: “Qualified Disaster Distributions”:
Investopedia: “Nine Penalty-Free IRA Withdrawals”:
Nerdwallet: “Cashing Out a 401(k): What a 401(k) Early Withdrawal Really Costs”:
Image Credits:
Pexels.com
Wikimedia Commons
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Intro Music: “Bluesy Vibes” – Doug Maxwell – YouTube Audio Library
Background and Outro Music: George Street Shuffle, Kevin McLeod, via YouTube Audio Library
DISCLAIMER: This video is for educational and informational purposes only. It is not intended to render tax advice or investment advice for individual situations. If you have questions regarding your particular situation, please consult with a qualified tax or investment professional.
The information in this video is current as of date of publication, and is subject to changes enacted by Congress or the IRS….(read more)
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