I am age 54 and started monthly pension payments under substanti[product key removed]dic-payments so I had code 2 on my 1099 for 2021. 2021 was the first year I received the monthly payment. Now I want to stop these payments for 2022. I have received around 4000.00 in payments for 2022 and 1300.00 in 2021. According to IRS, I will be subject to 10% penalty during the modification year and interest during the deferral. see excerpt below.
In that case, your tax for the modification year is increased by the amount that would have been imposed (but for the exception), plus interest for the deferral period.
For the 10% penalty do I take the withdrawal amount and multiply by 10% to get the amount of penalty?
Can someone please help me understand how to calculate or estimate the interest during deferral period?
