Trading, Accounts & Prohibited ActsQuestion 289 of 398
Generally, a withdrawal of earnings from a traditional IRA before age 59 1/2, without an exception, is subject to ordinary income tax plus an additional penalty of:
a.1%
b.2%
c.5%
d.10%
Explanation
Early distributions from a traditional IRA before age 59 1/2 are generally subject to a 10% additional tax on top of ordinary income tax, unless an exception applies (such as certain medical expenses, a first-home purchase up to limits, or disability).
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