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Retirement tax questions
The most likely explanation for the drop in your refund is that the amount of tax withheld from your 1099-R payment was not sufficient to account for the tax rate on your combined income (W-2 and 1099-R).
Tax was withheld from the W-2 based on your withholding elections for the W-2's income.
Unless you direct the retirement plan administrator otherwise, they tend to withhold a set percentage from your payments (e.g. 10%, 15% or 20%). That method often results in insufficient tax withheld for your total income (W-2, retirement, dividend/interest).
‎February 17, 2021
4:07 PM
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