Roth Conversion withdrawal before five years.
What is the tax penalty for withdrawing part of a conversion prior to the 5 year waiting period if client is under 59 1/2?
What is the tax penalty for withdrawing part of a conversion prior to the 5 year waiting period if client is under 59 1/2?
Permalink Submitted by Alan - IRA critic on Wed, 2015-04-15 18:02
10% penalty on the taxable portion of the conversion. Usually, the conversion is 100% taxable, but not always. If the conversion was 80% taxable, that 80% comes out before the 20% non taxable portion. Note that there are other penalty waivers besides being 59.5, so those should be checked out before paying the 10%.