Tax reform is about simplifying the tax code and lowering taxes on beneficial activities while reducing tax leakages, or loss of revenue, and raising taxes on harmful activities. Hereâs what TRAIN does towards that end. First, the reform increases the income tax exemption threshold and adjusts the income tax rates and tax brackets to ensure that Filipinos will have higher disposable income. It is a realization that the economy cannot grow and prosper by squeezing out taxes from the middle class.
Withdrawing your earnings is a different matter. Any money in a withdrawal that exceeds the amount of your original contributions is considered âearningsâ and is subject to possible penalties and taxes. The penalty for early withdrawal of earnings, except under certain specified conditions, is 10 percent of the earnings that you withdrew. In addition, you may have to pay income taxes on those withdrawals.
Technically, you can withdraw the funds in your SIMPLE IRA whenever you want to. However, if you make an unqualified withdrawal, you'll face a 10% early withdrawal penalty from the IRS. If withdrawals are made within the first two years of participation in the SIMPLE IRA, the penalty increases to 25%. Qualified reasons for withdrawing from a SIMPLE IRA include the following: You're over 59 1/2 years old. This is considered retirement age for the purpose of most types of retirement accounts.