Penalty tax

(redirected from Withdrawal Penalties)

Penalty tax

A federal tax that can be applied if a plan holder does not meet certain requirements when making withdrawals from a tax-advantaged retirement plan (for instance, if the plan holder has not reached age 59-1/2). This penalty tax is owed in addition to any income taxes due.

Penalty Tax

An excise tax imposed upon an unauthorized withdrawal from a retirement account, such as a 401(k) or an IRA. Most commonly, a penalty tax is assessed when one makes a withdrawal before the age of 59 1/2. See also: Hardship withdrawal.
References in periodicals archive ?
First Command Bank will waive any Bankgenerated early withdrawal penalties for clients who need to redeem a First Command Bank Certificate of Deposit prior to its maturity.
As long as they are older than 59XA, there will be no early withdrawal penalties.
M2 EQUITYBITES-December 10, 2015-CD early withdrawal penalties in effect at 89% of financial institutions
com's chief financial analyst Greg McBride said, "Using retirement savings to cover an emergency is a permanent setback to retirement planning, with the possibility of taxable distributions, early withdrawal penalties, loss of tax efficiency, and the inability to replace withdrawn funds in future years.
With so much discussion about when the Fed will raise interest rates, many cooperatives that offer share certificates-what the credit union world calls CDs-are wondering how long they should lock in rates and looking closely (at policies related to early withdrawal penalties.
Of course, we all know that the 401(k) rollover is ideal because it allows them to transfer their existing retirement account into another retirement account (usually a low-risk portfolio) without being subject to unnecessary taxes or withdrawal penalties.
Once again, there are possible tax consequences and early withdrawal penalties one needs to be aware of when taking money from any qualified retirement account or fund.
This is often a very attractive option as payments are lower initially, but consideration should be given to arrangement fees; tie in periods and any associated withdrawal penalties.
But Paige Capital is defending the action and accused Mr Lerner of trying to avoid massive early withdrawal penalties.
To provide the flexibility to respond to a range of life events, investors who are otherwise not able to avoid early withdrawal penalties should plan on maintaining some amounts in a taxable account.
Doing this, commonly called a trustee to trustee transfer, keeps your money from getting hit by early withdrawal penalties and taxes.
There are two things to look out for with easy access accounts - introductory bonuses and withdrawal penalties.