IRA distributions that you take before you reach age 59-½ (early distributions) are subject to a 10% additional tax (early distribution penalty), which is in addition to any income tax owed on the amount. For example, if you take an early distribution of $100,000 from your traditional IRA, it would be subject to an early distribution penalty of $10,000. But, if certain requirements are met, you get an exception to this penalty. The challenge is to accurately determine if you meet the requirements to qualify for an exception.
Denise Appleby | Forbes