If I took an early distribution from my IRA, and withheld 25%, why am I getting taxed more now?

When you take a distribution, the tax is not determined until you file your tax return.  Your tax rate is determined by your total income, so if you had other income you may pay more than just the amount withheld.  The 10% penalty is applied if you took the distribution early and an exception does not apply.  This is in addition to the regular income tax on the distribution.  For more information, please see Retirement topics - Exceptions to tax on early distributions.

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.