What is the tax penalty on a SIMPLE IRA withdrawal within the first two years of participation for an employee age 45?
Understand the Problem
The question is asking about the tax penalty for an early withdrawal from a SIMPLE IRA within the first two years of participation. We need to identify the correct penalty percentage.
Answer
A withdrawal from a SIMPLE IRA within the first 2 years has a 25% tax penalty for a 45 year old.
For an employee aged 45, a withdrawal from a SIMPLE IRA within the first two years of participation is subject to a 25% tax penalty, in addition to income taxes on the withdrawn amount.
Answer for screen readers
For an employee aged 45, a withdrawal from a SIMPLE IRA within the first two years of participation is subject to a 25% tax penalty, in addition to income taxes on the withdrawn amount.
More Information
The penalty increases from 10% to 25% if the withdrawal is made within the first 2 years of participation.
Tips
Ensure you know how long you have participated in the plan to avoid unexpected penalties.
Sources
AI-generated content may contain errors. Please verify critical information
