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SIMPLE IRA ON WITHDRAWLS? early withdraw total for both 93,025.37 paid already 16,630.56 but still have more to pay 9303. why so much more

Forum|Forum|7 years ago
June 4, 2019
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TurboTax Home & Biz Windows

Best answer by macuser_22

Approximately 20% was withheld to pay the tax. If you are in the 20% percent marginal tax bracket, that would pay the tax. Then the additional 10% ($9,303) penalty must be added on. Probably you should have had 30% withheld for tax.

Lisa995

Employee

Early withdrawals are taxed at the tax rate for the bracket your total income lands in...as well as a 10% penalty for early withdrawal. Its quite common for the withholdings on a early retirement distribution to create a larger tax liability then the withholdings will cover.

♪♫•*¨*•.¸¸♥Lisa♥ ¸¸.•*¨*•♫♪

VolvoGirl

Employee

That is the 10% Early Withdrawal Penalty. It has to break out and show the 10% penalty separately on your return on line 59 and then you get credit for all the withholding taken out on Line 64.

macuser_22Answer

Employee

Approximately 20% was withheld to pay the tax. If you are in the 20% percent marginal tax bracket, that would pay the tax. Then the additional 10% ($9,303) penalty must be added on. Probably you should have had 30% withheld for tax.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**