In a roth IRA, the contributions you make have already been taxed and are not tax-deductible. Since you’ve already paid taxes on these funds, you are not subject to income tax at withdrawal. You can even take certain early distributions without paying an early withdrawal penalty. If you have had your roth IRA for more than 5 years and are at least 59 ½ years old, distributions from the account are tax-free and penalty free. This means that the earnings your roth IRA generates are considered tax-free.