@fanfare - So I think some don't get the concept. I am going to try to roll up all the common questions here.
Firstly, remember last year Intuit had this form ready on 02/26/2022, so it's not a secret! and it took them that long last year, so no complaining about how slow they are etc. ?
You either had them withhold tax when you made the distribution or not. If you did, well then. Yes you have to wait for the form to get repayment of over withholding and there isn't much you can do right now..
If you didn't have your financial institution withhold from the distribution then keep reading!
1) You were allowed to withdraw up to 100,000 from a retirement account.
2) You can pay it back OR pay taxes on the amount over 3 years without penalty
3) You have two choices of how it is treated by the IRS. You can pay taxes on it as income or pay it back:
a) all at once for the year taken
b) or carry forward 1/3 of the distribution as income into the next 3 years.
So bottom-line is you increased your income by 1/3 of the distribution amount for the next 3 years. So, it is relatively easy to determine what additional taxes this event generated.
1) Do your taxes with TurboTax without the CARES distribution added to your income.
2) See what your refund amount is before the CARES act income is added in
3) Look at TurboTax and find "TAXABLE INCOME" (this tells you your tax bracket)
4) now multiply your tax bracket percentage times 1/3 of your CAREs distribution
5) subtract your "refund" amount from CARES tax liability
6) make an estimated payment for TY 2021 to IRS for that amount.
7) There, you got your "refund" without even filing.
The only thing hard here might be trying to find your Taxable Income in Turbo Tax. It isn't really that bad, you just have to browse the actual 1040 that Turbo Tax generates.
Also you DO NOT need your taxes to file FAFSA for student aid, AND you can update it later.
EXAMPLE:
$90,000 - CARES withdrawal
$30,000 - income brought forward for 3 years
15% - tax bracket (taxable income used to determine this)
$4500 - a year extra tax for 3 years
$2000 - "refund" before adding in CARES income carry forward
$-2500 - mail this to IRS - no money owed to either now!
