Message Font: Serif | Sans-Serif
No. of Recommendations: 0

Hi there...

[[ Apart from the 10% penalty for early withdrawals from a Roth ira, I hear that there is an additional
10% penalty (for a total of 20%) for withdrawals that are made from Roth accounts that were
created in 1998.]]

That "additional" penalty was under the OLD rules. They no longer apply with the imposition of the 1998 Tax Law Changes.

[[ Under what cicumstances does the additional penalty get triggered? Any
information would be appreciated.]]

It doesn't get triggered any longer. Prior to the law change, it had to do with an early withdrawal of converted funds. But, again, the "additional" 10% penalty has been removed. Anybody that tells you that the "additional" penalty is still in force hasn't kept up with the law changes. Period.

I'll discuss this issue in more detail in next weeks installment of "The Roth IRA" in the Taxes FAQ area. You might want to check it out.

[[ Thanks.]]

My Pleasure...
TMF Taxes

Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. There is still time available to do that tax planning (and tax saving) before the end of the year. So just click on this link ( to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on and you'll be right at the home page. Pay special attention to the "archives" section. Check it out. Finally, if you need to get to the IRS web site, click on to go directly there.
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.