What happens if I have to cash in my Roth IRA early? Is this taxed as regular income?
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It depends. You can take out any money you’ve contributed to a Roth IRA at any time, without paying taxes or penalties. Money you “earn” on your contributions is another matter. Depending on the circumstance, you could be subject both to income taxes and a 10% penalty. Here are some examples of so-called qualified distributions.