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.
By Emily Brandon. + More. If you withdraw money from your individual retirement account before age 59 1/2, you will generally have to pay a 10 percent early withdrawal penalty in addition to income tax on the amount withdrawn.urn age 59 1/2. Once you turn age 59 1/2, you can withdraw any amount from your IRA without having to pay the 10 percent penalty. But regular income tax will still be due on each withdrawal.