All FAQs about transactions & taxes
We're happy to hear it.
Pre-tax contributions withdrawn from a tax-deferred retirement plan are taxed as ordinary income. Any after-tax funds in the account are returned to you tax-free; however, the earnings from these after-tax contributions are still taxable.
Withdrawals from Traditional and SEP IRAs are generally taxed as ordinary income. However, if you have funded your IRA with non-deductible contributions, the non-deductible contribution portion of your IRA is not taxable upon withdrawal (earnings on the non-deductible contributions will still be subject to ordinary income tax). Withdrawals before age 59½ may be subject to a 10% early withdrawal penalty unless certain conditions are met.*
For lifetime annuity payments, fixed period annuity payments (set up for more than 10 years), and Minimum Distribution Option payments, there are no withholding requirements. This means you can either designate a flat dollar amount, a fixed percentage you want withheld, or opt to have no withholding from these types of distributions. If you do not make an election, we are required by the IRS to withhold 10% of your payments.
- It's part of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the employee or the joint lives (or joint life expectancies) of such employee and his designated beneficiary.
- You leave the sponsoring employer at age 55 or older.
- You have unreimbursed medical expenses that exceed 7.5% of your adjusted gross income.
- You are disabled as prescribed by IRS Regulations.
- The withdrawal is made by your beneficiary after your death.
- The withdrawal is made from an account issued through a Qualified Domestic Relations Order.
- The withdrawal is made for up to $10,000 to pay for first-time homebuyer expenses (IRA Only).