Posted: 3/26/2007 9:38:34 AM EDT
| If I decide to close it out would the IRS hit me with penalties? Anyone have done this before? |
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Yes, they'll withhold income tax and then an extra 10% for penalty unless you are withdrawing it under one of the qualified exceptions: Exceptions: * Death * Disability * Medical expenses in excess of 7.5% of AGI * Health insurance premiums if unemployed for 12 consecutive weeks * Qualifying higher education expenses * Qualifying first time home purchase ($10,000 lifetime limit) * Substantially equal payments made over life expectancy |