Form 1099-Q income

Forum|Forum|1 year ago
March 7, 2025
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Using Turbotax in the personal income section, the last item in the list is Misc. Income and its indicates that this includes Forms 1099-Q. What I don't understand is that it takes line 1 Gross Distribution as a whole and adds it to personal income. We have contributed using after tax dollars, so I assumed that only the earnings corresponding to the distribution would be subject to tax and it could be 100% taxable or less depending on other factors. Isn't this double taxing? Shouldn't I just enter the earnings and not the Gross?

Hal_Al

Employee

Q. Shouldn't I just enter the earnings and not the Gross?

A, No. You enter both, follow the interview and let TurboTax calculate the taxable amount.

That said, you are correct, the taxable amount is the earnings, shown in box 2. This assumes it's a totally non-qualified distribution. That is, you have no qualified educational expenses. In addition to the tax on the earnings, you will be subject to a 10% penalty. The 10% is also allied to the earnings and not the total distribution.