don't understand Additional tax on IRAs and tax-favored accounts?

Forum|Forum|1 year ago
February 11, 2025
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xmasbaby0

Employee

I PAID TAX ON THE RETIREMENT MONEY ALREADY

You had tax withheld from the distributions from the retirement account, just like when an employer withheld tax from your paychecks. When you enter it all into the software, the calculations are done to reconcile the amount of income you received and the amount of tax that was withheld. You might owe more or you might get a refund.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

roncarliniAuthor

But doesn't the amount of the IRA distribution and pension funds go into total income? And thus the tax owed is from the total adjusted income?

xmasbaby0

Employee

Yes. If you had tax withheld when you took a distribution or had tax withheld from a pension or even from Social Security benefits---it is just like when an employer withheld tax from your paychecks. That was an estimated amount of tax. All of your income and all of your tax withheld has to be entered, and then the software reconciles it and determines if you get a refund or owe more.