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Are the contributions to a traditional IRA taxed differently than the earnings when withdrawn and/or are they both considered taxable income when withdrawn? And at what rate? Capital gain or regular income tax?

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Contributions to a traditional IRA are treated as ordinary income when they're withdrawn, as well as the earnings.

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The IRA withdrawals are not subject to FICA withholdings (Social Security or Medicare). Other than that, they are treated the same (as ordinary income).

Edited - to clarify per comment below.

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  • "the same" meaning as ordinary income not capital gains? thanks
    – Nan
    Feb 10, 2011 at 3:44

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