Early Withdrawal

Question: Tax implications because of IRA Early Withdrawal?

Hello. I lost my job 1+ months ago and am now thinking of tapping into my IRA. Aside from the bank’s penalty fee, what are the tax implications of doing this? I know I can get X amount out and if I return it (in full!) before 12/31 the IRS won’t tax me. But what about if I withdraw the money (without the bank withholding)? How much should I set aside for taxes if I am not able to return the amount in full? Is this Federal and State or just Federal? Please, advise.

Answer: First, I think it is 60 days that you have to put the money back, not until the end of the year.
Now, the IRS will tax the money you took out of the IRA plus charge a 10% penalty one the amount of the withdrawal.

Peter Buckingham from British Film Council on the Digital Re