Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.
In brief, yes, if you take a distribution
from a traditional IRA, and you are under the age of 59-1/2 years of age, unless you meet one of the exceptions...(which the purchase of gold) is not one of them, the withdrawal amount will be taxed as ordinary income
, and a 10% early withdrawal penalty will apply. SEE EXCEPTIONS BELOW:
The federal government
charges a 10% penalty for early withdrawals. A state
tax penalty may also apply to early withdrawals. You may be able to avoid a penalty on early withdrawals if your reason for withdrawing funds is one of the following:
First time home purchase. You may be able to withdraw funds for certain home purchases, subject to a lifetime limit of $10,000 in pre-tax dollars. You must use the money for this purpose within 120 days of withdrawal.
Qualified education. There’s no penalty on withdrawals if you use your funds toward certain educational expenses for you and your immediate family.
. If you’re disabled, you can withdraw IRA funds without penalty.
Unreimbursed medical expenses
. Withdrawals are allowed without penalty if you use the funds to pay unreimbursed medical expenses in excess of 7.5% of your adjusted gross income
Health insurance. If you’re unemployed for at least 12 weeks, you may withdraw funds to pay health insurance premiums for yourself, your spouse, or your dependents
Substantially equal periodic payments. You can also avoid an early withdrawal penalty if you elect to receive your funds on a regular distribution schedule, which the IRS
calls “substantially equal periodic payments.”