Will A Distribution From My Traditional IRA Be Penalty Free?

Some clients may have unique circumstances that could impact the taxes (and penalties) that must be paid if a distribution is taken from their traditional IRA. The exceptions to the usual distribution rules can be hard to remember especially since many exceptions rarely come up.

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To help make this easier, we have created the “Will A Distribution From My Traditional IRA Be Penalty-Free?” flowchart. This flowchart helps to quickly identify unique situations that affect whether a distribution is taxed and penalized, and considers the following:

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• Implications for IRAs with nondeductible IRA contributions

• Conditions that trigger the 10% early distribution penalty

• Exceptions to the 10% early distribution penalty

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