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.
Whether you withdraw funds from an IRA or a 401(k), the income tax implications are usually the same; the distributions are taxable income. Distributions (other than periodic distributions) from both types of retirement plans occurring before age 59Â½ are subject to an additional 10 percent penalty for early withdrawal.hether you withdraw funds from an IRA or a 401(k), the income tax implications are usually the same; the distributions are taxable income. Distributions (other than periodic distributions) from both types of retirement plans occurring before age 59Â½ are subject to an additional 10 percent penalty for early withdrawal.