Guest CCDB Posted February 1, 2000 Share Posted February 1, 2000 Our employer started a SIMPLE IRA back in August, 1998. I've been told that if I remove money from the plan, the amount withdrawn will be taxed, and an additional 10% penalty assessed. Is the penalty assesed on the total amount withdrawn, or is it on the tax? For example, if I withdraw $10,000, and my tax bracket is 28% (or $2,800), is the 10% penalty $1,000 ($10,000 x 10%) or $280.00 ($2,800 x 10%)? Link to comment Share on other sites More sharing options...
Michael Devault Posted February 1, 2000 Share Posted February 1, 2000 The penalty is imposed on the amount of the withdrawal. In your example, it would be imposed on the $10,000 withdrawn. Further, if the withdrawal occurs during the 2 year period following the date on which you first participated in the SIMPLE plan, the penalty is increased from 10% to 25%! Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now