I started doing my taxes recently and after entering my W2 and other things, Turbo tax said I had about $7008 refund coming to me. Then I Entered a 1099-R for a $27,000 IRA disbursement and I was shocked to see Turbo tax say I now owe about $2466. I had not paid taxes on the $27K IRA when I withdrew it, but I didn't think the effect will be about a $9000 swing. Can somebody help me understand how this $27K IRA distribution could have such devastating effect. Turbo Tax said it will only recognize $2700 in taxes I didn't pay but I didn't expect the effect to be $9K. I need advice on this. Thanks.
