SOLVED - DISREGARD POST
Last year, my wife did a backdoor conversion from her traditional IRA to her Roth. She deducted 10% from her distribution amount for federal taxes. Schwab sent 2 separate 1099-Rs: (1) for the federal tax that was deducted from the proceeds, with boxes 1 (Gross distribution) and 4 (Federal income tax withheld) being the same amounts, and (2) for the net amount with zero in box 4. I entered all details accordingly but TT shows we have to pay 10% on the federal tax amount withheld. She turned 60 in December 2025.
Why would we have to pay a 10% penalty or tax on the federal tax withheld and if this needs correcting, where in TT can I do so?
