A 50 -year-old salaried employee withdraws $9,000 from their contributions to their Roth IRA, which has been held for 8 years, to pay for a major home renovation. What are the taxes and penalties on this withdrawal?

Roth IRA contributions can be withdrawn at any time without income tax or an early-withdrawal penalty. Because the $9,000 is withdrawn from contributions—not investment earnings—the employee owes neither taxes nor penalties. The account’s 8-year holding period and the employee’s age do not change this rule for contributions.

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