• When you have an Individual Retirement Account (IRA), the rules of the Internal Revenue Service generally require you to refrain from pulling money out until you reach age 59 ½. There's no law against such withdrawals. However, unless the early distribution qualifies for an exception, you will have to pay regular taxes plus a 10 percent penalty tax on the money withdrawn.
  
  

Home and Tuition Expenses

• Early distribution from an IRA is allowed if the money is spent for the purchase of a first home or for qualified major repair/renovation. For Roth IRAs only, this is limited to a cumulative total of $10,000. Early withdrawal is also allowed to pay for certain educational expenses, such as college tuition. There is no penalty for allowed early distributions for home or school expenses. You must pay regular taxes if the money would normally be taxed upon withdrawal after age 59 1/2.
  
  

Hardship

• Major medical expenses can be paid off with IRA funds without penalty. The IRS rules state that such expenses must equal at least 7.5 percent of annual income. Early distribution is also permitted without penalty if a person becomes disabled. If an IRA account owner loses his/her job, IRA money may be used to pay health insurance premiums for the account owner and members of the immediate family without incurring penalties. As with qualified distributions for education or home, regular taxes will apply if the funds would normally be taxed upon withdrawal after age 59 1/2.
  
  

Roth IRA Contributions

• An IRA account owner may withdraw contributions made to a Roth IRA (but not other types of IRAs) at any time without penalty. If funds are distributed early from a Roth IRA, the IRS "ordering rules" consider the money to be contributed funds up to the lifetime total of contributions that have been made to the account. Because there is no tax deduction for Roth contributions, all taxes have already been paid on these funds. There is also no tax liability if they are withdrawn early.