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5823203
April 4, 2025
Question

If TurboTax says the IRS lets me withdraw my retirement early without tax due to disability, why am I paying taxes on it?

  • April 4, 2025
  • 2 replies
  • 0 views
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    2 replies

    V
    Vanessa A
    April 4, 2025

    It doesn't say you you have no tax, it is saying that if you qualify then you would not have to pay the 10% tax penalty.  There is a 10% early withdraw penalty if you do not meet one of the exceptions to the penalty. 

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    O
    Opus 17
    Employee
    April 4, 2025

    Any time you have retirement funds where the contributions were tax-free, you must pay income tax on the withdrawals.  This includes tax deductible contributions, or salary deferrals, or pension contributions paid by your employer. 

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