Typically, when a taxpayer withdraws money from a Traditional IRA account before the age of 59 ½ they are required to pay an additional 10% tax on the distribution in addition to paying taxes on regular income tax on that amount. There are, however, exceptions to this rule:
- You have unreimbursed medical expenses that are more than 7.5% of your adjusted gross income.
- The distributions are not more than the cost of your medical insurance.
- You are disabled.
- You are the beneficiary of a deceased IRA owner.
- You are receiving distributions in the form of an annuity.
- The distributions are not more than your qualified higher education expenses.
- You use the distributions to buy, build, or rebuild a first home.
- The distribution is due to an IRS levy of the qualified plan.
- The distribution is a qualified reservist distribution. **
Withdrawing money from a Traditional IRA before the age of 59 ½ under any circumstances other than these will create a tax burden. Should you find yourself in these circumstances make sure contact a competent tax consultant.
** Source: http://www.irs.gov/publications/p590/ch01.html