What are the tax consequences of an "early" IRA withdrawal?

You can withdraw funds from your IRA at any time but in general, withdrawing funds from your IRA prior to age 59 ½ means you'll have to pay a 10% early withdrawal penalty. You may avoid the penalty if you're withdrawing because of:

• First time home purchase (USD 10,000 lifetime limit)…

Distributions from a Traditional IRA are treated as income to you. You will receive an IRS Form 1099-R summarizing the amount distributed and the taxes withheld, if any.

In a Roth IRA, if you take a distribution after the account has been open five years, the distribution will not be included in your income. If taken within the 5-year period, it will be taxable, like a Traditional IRA distribution…

Roth IRA earnings may be withdrawn tax-free if your Roth IRA has been established for at least five years and one of the following apply:

• Age 59 ½
• Disability…

Yes, an employee can withdraw from the SIMPLE IRA whenever they wish. They will be subject to tax requirements.

SIMPLE IRA withdrawals are typically subject to income tax on any amount withdrawn.  Early withdrawals, which are those made prior to the account holder reaching the age of 59 ½, may be subject to an additional tax of 10% or 25%…