Did anyone else choose to have taxes come directly out of their withdrawal in 2020? I did 10% for federal and state.
im realizing this year that I maybe screwed up last year when I elected to do the 3 year spread because I put all of the taxes I already paid on last years return, but only 1/3 of the income.
(I took out 16k and paid $1600 federal at the withdrawal)
Now this year, when I add the 1/3 as income (5333) it makes my federal refund drop almost 1100.
So then I redid my taxes for 2020 on paper to see what it would have been like last year if I had put the whole 16k withdrawal at the same time as I claimed the taxes I prepaid , and it only made my refund $300 less.
I’m going to go over it again to be sure on paper it was correct. Last year we did file
jointly, and this year it was seeming to work out better filing separately because of the advance child tax credit. So it could be the reason that this year the tax would be such a bigger difference for only 5000.
anyways I still have keep messing with it and figuring out what works out best but I am
considering filing an amended return for last year so I can just be done with the Covid withdrawal,and was just wondering if anyone has come across this if they prepaid taxes in 2020
