What is the tax on IRA distributions?

Answer by  Gus2 (12)

Roth IRAs are not taxed since they are funded with pre-taxed dollars. Regular IRA tax rates depend on the total income, including interest on other investments, Social Security payments, and capital gains. Determinyour TOTAL income and look at current tax brackets to see the most likely tax rate.

Answer by  Kdm (180)

Traditional IRAs are taxed as normal distributions(assuming the distribution is not subject to an early distribution penalty). Roth IRAs are not taxed as long as you meet the requirements.

Answer by  Caenaise (165)

You pay ordinary income tax (both Federal and State) on traditional IRA distributions. No income tax is due on distributions from a non-deductible IRA or a Roth. If you are younger than 59 1/2 and no exception applies, you will pay an additional 10% penalty on distributions.

Answer by  OU (135)

The distribution will be included in your taxable income for the year. If the distribution is early, ( before retirement age ) you will also have to pay a 10 percent penalty. This means that you should have a high percentage withheld for taxes on any IRA early distribution ( 25 - 30 percent )