IRA Withdrawal - Penalties?

[cputrwz]

I realize the majority of the answers would be to first say "DON'T DO IT!" but my question is generic  regarding the penalties... I see there is a 10% penalty... is there anything on top of that?  When I do the withdrawal, it is taking the 10% out in advance.. when I file my taxes will there be an additional penalty?  Or is the upfront 10% deduction the extent of it?

[cputrwz]

LOL I was drinking last night, I think I put this in the wrong forum..   My bad!

[Flyingifr]

Wrong forum or not, here is the answer (from an IRS licensed Enrolled Agent with over 40 years tax experience):

 

The 10% they take from your withdrawal just covers the Section 72t penalty. The entire withdrawal (including the taxes withheld) is still taxable income at your bracket rate. Based on the rest of your tax situation, and your other 2024 tax payments, there may be an underpayment penalty, based on your prior year's tax liability. I see this happen all the time.

 

You don't say what you used the withdrawn money for - there may be an exception for the 01% penalty, but the withdrawal is taxable no matter what.,

[Burgerwars]

12 hours ago, cputrwz said:

LOL I was drinking last night, I think I put this in the wrong forum..   My bad!

 

This forum is the most active, so it's good to be drunk. 🥴 

[cputrwz]

LOL thank you!  Appreciate the responses.   I had them withhold 32% of the proceeds, so hopefully that will cover everything.

Edited January 14, 2025 by cputrwz

[Flyingifr]

10% Section 72t penalty plus 22% for the Federal tax bracket. Except for any State/Local tax you should be OK.