how to calculate taxes owed on early withdrawal from an ira
A: With a few exceptions, early withdrawals from traditional or Roth IRAs generally incur a tax penalty equal to 10% of the taxable amount. To calculate the penalty on an early withdrawal, simply multiply the taxable distribution amount by 10%.lthough the IRS imposes the 10% early withdrawal penalty to dissuade IRA participants from using their savings before retirement, this penalty is only applied to the withdrawal of taxable funds. If you withdraw funds that are not subject to income tax, there is no penalty for distributions taken at any time.