On a regular basis I get clients who have taken a distribution out of their qualified individual retirement account or retirement plan before reaching 59 ½ years of age (the time when you can take a distribution and be subject to the 10% penalty). They do this before informing their bookkeeper, CPA, or attorney of their intent. This can trigger an additional tax on top of other income tax they may owe.
Early Withdrawals. An early withdrawal normally is taking cash out of a retirement plan before the taxpayer is 59½ years old. The IRS charges a 10 percent penalty
Continue Reading I took an Early Withdrawal from my Retirement Account. Now what?