Question

1099-R, federal tax appears wrong

Forum|Forum|6 years ago
January 25, 2020
1 reply
0 views

On my 1099-R, the payer withheld 20% for federal taxes when they provided me with a total distribution in 2019. If the tax penalty for early withdrawal before 59 & 1/2 years old is 10%, why would Turbo Tax have me paying an additional 10% of the gross distribution? I assumed I would get a credit for the 10% of extra withholding that the payer held. As it stands I am being penalized a total of 30% of the grass distribution. Please help. @1099R

DoninGA

Employee

All the federal taxes withheld and reported on the Form 1099-R in box 4 are entered on your tax return as a tax payment (just like from a W-2).

The 10% early withdrawal penalty is only calculated on a tax return and entered as a tax liability. The taxable amount withdrawn is added to your tax return as ordinary income.

If your total tax liabilities are less than your total tax payments you will get a tax refund for the overpayment. If the total tax liabilities are greater than your total tax payments you will have taxes owed.