Question

Roth 401k to Roth IRA to Early Withdrawal - PENALTY

Forum|Forum|2 years ago
April 13, 2024
1 reply
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My young adult son took a total distribution from his Roth IRS - started contributing in 2022. At first, TurboTax was calculating this as taxable income. I finally figure out how to make it show non-taxable. And read that others had this same issue.

Now my question is that the 1099-R shows that $500 was withheld (federal) from his distribution. The $500 withheld is being added to his W-2 withholdings.

I didn't see a place to enter that he owes this penalty. Therefore, I feel I'm increasing the withholding amount, thus getting a larger refund.

Where would I put that he should pay the penalty - which would be offset by the withholding?

Thanks.

D

DanaB27

You can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free. Therefore, only withdrawn earnings would be subject to the 10% early withdrawal penalty. TurboTax will automatically calculate the penalty if he doesn't qualify for an exception. You can check Schedule 2 line 8 if he had a penalty.

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