Your first statement is what I don't understand. When I withdrew the funds from both accounts, I had 20% in federal taxes withheld for me. The full tax is recorded on my 2020 tax return.
Correct me if I'm wrong, but what I understand is that I included the tax paid on the full withdrawal in 2020, but only 1/3rd of the income. Now I'm claiming the second third this year, but TT is not including the fact that I already had the 20% tax paid. Can someone break it down for me in the example below (using fake numbers to simplify the equation). Not worried about state taxes at this time.
401K withdrawal $100,000
Federal withheld $20,000
2020 return
Claim $33,333 as income.
Claimed $20,000 tax.
Received $10,000 refund
2021 return
Claim $33,333 as income.
Claimed $0 tax??
Owe $6,000
2022 return
Claim $33,333 as income.
Claim $0 tax.
Owe
