I entered a 1099 -R into my federal tax form. We withdrew money for a reason not listed for exemptions. We also paid the $500 federal tax on this form when it was withdrawn. But it took away over $700 of our refund. It is not showing that the tax was already paid on this withdraw. Please help.
When you enter the 1099-R and enter the amount of withholding, TurboTax credits your taxes with the amount of the withholding in the same way it credits withholding from a W-2. It is included in the amount on the Federal income tax withheld from Forms W-2 and 1099 line on form 1040.
The withholding amount is just an estimate of taxes that might be owed on the withdrawal. The actual taxes are calculated based on your total income and entered in TurboTax. It also enters the 10% early withdrawal penalty amount. The $500 that was withheld would be enough for the 10% early withdrawal penalty but would not offset any of the ordinary income tax owed on the withdrawal. $700 of additional taxes would would be 14% meaning most of the withdrawal was taxed in the 15% tax bracket. The taxes and early withdrawal penalty was 24% of the withdrawal amount and only 10% was withheld.
When you enter the 1099-R and enter the amount of withholding, TurboTax credits your taxes with the amount of the withholding in the same way it credits withholding from a W-2. It is included in the amount on the Federal income tax withheld from Forms W-2 and 1099 line on form 1040.
The withholding amount is just an estimate of taxes that might be owed on the withdrawal. The actual taxes are calculated based on your total income and entered in TurboTax. It also enters the 10% early withdrawal penalty amount. The $500 that was withheld would be enough for the 10% early withdrawal penalty but would not offset any of the ordinary income tax owed on the withdrawal. $700 of additional taxes would would be 14% meaning most of the withdrawal was taxed in the 15% tax bracket. The taxes and early withdrawal penalty was 24% of the withdrawal amount and only 10% was withheld.