Do you mean the income that the IRA gains from investments, or do you mean the amount that you withdraw from the IRA for personal use?
The IRA itself is a tax-exempt entity so you don't have to pay or report taxes for the earnings that it makes. Taxes are paid on any amount that the IRA distribute to you, the plan participant, at your income tax rate. If you withdraw from the IRA before the age of 59 1/2 years old, you may also be subject to a 10% penalty, except if you meet one of the hardship withdrawal exemptions.
Income earned within a traditional IRA is not taxable. What is taxable is the amount of any withdrawals from an IRA. For those individuals who make withdrawals before age 59 1/2, there may be tax penalties in addition to the tax on the actual funds withdrawn. I have intentionally not commented on Roth IRA's although during their accumulation phase, income earned within the Roth IRA is not taxable at the time it is earned and deferred properly, may never be taxed. I hope this helps and good luck
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. This question was posted by a WalletHub user.
Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.