This article explains the reasons you may request a distribution from your M1 IRA, some important rules and exceptions for each distribution type, and step-by-step instructions for requesting a distribution. It also covers tax considerations, forms you'll receive, and includes answers to frequently asked questions.
IRA distribution types
IRA distributions generally fall under the categories below:
Premature or Early Distribution
Normal Distribution
Excess Contribution Removal (before or after tax deadline)
Death (Beneficiary) Distribution
Disability Distribution
Direct Rollover to Another Institution
Each distribution type has specific rules and potential tax implications. Understanding the reason for your IRA distribution helps M1 process your request accurately.
How to request a distribution from your M1 IRA
You can request an IRA distribution through the M1 platform. Follow the steps below:
Web and Mobile
Select the Move Money button.
Select One-Time Transfer
Choose your IRA account as the source.
Choose your destination to withdraw the funds
Enter the amount
Enter the distribution reason
Follow the remaining prompts to complete your request.
Note: For certain distribution types (e.g., Death, Disability, Direct Rollover), you may be required to provide supporting documentation. If prompted, you may need to contact M1 Client Success to ensure your request is processed correctly.
Distribution reasons and common exceptions
1. Premature (Early) distribution
Withdrawals from IRAs before age 59½ are generally considered early and may be subject to a 10% IRS penalty, in addition to ordinary income tax.
Traditional, SEP, and SIMPLE IRAs:
Early withdrawals are generally subject to taxes and penalties as described above. A 25% penalty may apply if you take a distribution from a SIMPLE IRA within the first 2 years of participation.
Roth IRAs:
You can usually withdraw your original contributions tax- and penalty-free at any time. Earnings may be subject to taxes and penalties if withdrawn before age 59½ and before the account has been open for 5 years.
2. Normal distribution
Traditional, SEP, or SIMPLE IRA: Taken after age 59½.
Roth IRA: Taken after age 59½ and the account has been open at least 5 years.
No IRS early withdrawal penalty. The amount withdrawn from a Traditional IRA is taxable as ordinary income. Roth IRA qualified distributions are tax-free and penalty-free.
Required Minimum Distributions (RMDs)
You generally have to start taking withdrawals from your Traditional IRA, SIMPLE IRA, or SEP IRA when you reach age 73.
RMDs are required annually. Failing to take an RMD may result in a tax penalty.
3. Excess contribution removal
Before Tax Deadline (typically April 15, or October 15 with extension)
Remove excess contribution plus any earnings.
Withdraw earnings as a taxable early distribution (may be subject to penalty if under 59½).
You may need to amend your tax return if you have already filed.
After tax deadline
Only the excess contribution itself can be withdrawn (not earnings).
A 6% IRS excise tax applies for each year the excess remains.
4. Death (Beneficiary distribution)
Early withdrawal penalties don’t apply after the original IRA owner’s death.
After the death of the IRA’s owner, beneficiaries can take early withdrawals from the IRA without incurring the extra 10%.
5. Disability
Disability-based IRA distribution exceptions apply when an IRA owner suffers a total and permanent disability.
The standards for proving you made an exempt Roth IRA early withdrawal are high. You must get a doctor to attest that your condition is indefinite, prolonged or terminal.
The IRS will not automatically qualify you for a 72(t) tax exemption just because a disability has left you unemployed.
The definition of substantial gainful activity usually encompasses any part- or full-time work for which you earn minimum wage.
6. Direct rollover
Allows direct transfer of your M1 IRA balance to another IRA or retirement plan.
M1 requires a signed Letter of Acceptance from the receiving custodian before initiating a direct rollover.
Tip: Contact M1 Client Success for special situations, including death, disability, or direct rollovers.
Tax forms generated by M1
Form 1099-R: Issued for any reportable distribution from your IRA. This form shows the distribution amount and the distribution code for your tax filing purposes.
Form 5498: Issued for IRA contributions (including rollovers), but not for distributions.
M1 and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. It is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.
Brokerage accounts on the M1 platform are either fully disclosed to APEX Clearing or cleared through M1 Finance LLC. Please look at your account statement to determine how your account is cleared.
All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future performance. Using margin can add to these risks. Users utilizing APEX cleared margin accounts should review the APEX margin account risk disclosure before borrowing. Users utilizing M1 cleared margin accounts should review the M1 margin account risk disclosure before borrowing. M1 Margin Loans are available on margin accounts with at least $2,000 invested per account. Not available for Retirement or Custodial accounts. Margin rates may vary.
Brokerage products and services are offered by M1 Finance LLC, Member FINRA / SIPC, and a wholly owned subsidiary of M1 Holdings, Inc.
This content was generated using artificial intelligence and is intended for informational and educational purposes only. While reasonable efforts are made to ensure accuracy, AI-generated outputs may omit key context; and should not be construed as financial, investment, legal, or tax advice. Users should independently verify all information and consult a qualified professional before making any financial decisions.
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