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What Are the Taxes and Penalties for Early IRA Withdrawals?
What Are the Taxes and Penalties for Early IRA Withdrawals?

Early IRA withdrawals may trigger taxes and penalties. Here’s what the IRS says—and what exceptions may apply.

Gregory avatar
Written by Gregory
Updated over a week ago

Withdrawing money from your Monorail IRA before age 59½ may lead to income taxes and an additional 10% early withdrawal penalty, depending on your circumstances.

These rules are established by the IRS and apply to most traditional and Roth IRA withdrawals made before retirement age.



💸 When Is the 10% Penalty Applied?

If you take a distribution before age 59½, the IRS may apply:

  • Ordinary income tax on the withdrawn amount

  • An additional 10% early withdrawal penalty


✅ Exceptions to the 10% Penalty

Certain early withdrawals may be penalty-free, including:

  • First-time home purchase (up to $10,000)

  • Qualified education expenses

  • Unreimbursed medical expenses

  • Health insurance premiums after job loss

  • Permanent disability

  • Childbirth or adoption expenses

  • IRS levy on your account

See the full list of exceptions here:
🔗 IRS: Exceptions to Tax on Early Distributions

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