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Turbotax is not calculating the 10% non qualified 529 withdrawal penalty correctly. It is taxed at my w2 rate. how do i fix this? I entered the 1099-q data.
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February 16, 2021
4:42 PM
Anonymous
Not applicable
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Retirement tax questions
A nonqualified 529 plan withdrawal is subject to your regular tax rate (what I assume you mean by your W2 rate) PLUS a 10% penalty. It is not taxed at a flat 10%. It sounds like TurboTax is calculating correctly but that perhaps you weren't prepared for the full tax consequence of the withdrawal.
February 16, 2021
4:57 PM
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Retirement tax questions
thank you for the reply. yes i misunderstood it.
February 16, 2021
8:44 PM