For taxpayers over the age of 59 1/2, withdrawals from a traditional IRA are taxed as regular income, according to IRS.gov. The tax is determined by the person's tax bracket for the year in which the IRA distribution is taken.
A Roth IRA has different rules than a traditional IRA, explains the IRS. If the withdrawal is from a Roth IRA and the person is over the age of 59 1/2, and the account is at least five years old, the distribution is tax-free, explains CNN.com. This is because the contributions were made after the individual paid income taxes on them. Those holding a Roth IRA can generally withdraw money from the accounts before reaching the age of 59 1/2, with no penalties.
For a withdrawal made from a traditional IRA when the taxpayer is under the age of 59 1/2, the amount of the withdrawal is considered income for the year the distribution is made, and is also subject to a 10 percent early withdrawal penalty. There are exceptions to the early withdrawal penalty, however, notes the IRS. These include death, disability, qualified higher education expenses, purchasing your first home and medical expenses, among others.