If you withdraw funds from a Keogh plan before age 59½, you will have to pay a _____ federal income tax penalty.
A) 5%
B) 10%
C) 15%
D) 20%
E) 25%

Question

Quizplus · Accepted Answer

If you withdraw funds from a Keogh plan (also known as a HR-10 plan) before age 59½, you will have to pay a 10% federal income tax penalty on top of any regular income taxes owed on the distribution. There are some exceptions to the penalty, such as if the distribution is due to disability or death, but in general, early withdrawals from a Keogh plan should be avoided if possible to avoid the penalty.

If You Withdraw Funds from a Keogh Plan Before Age