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Retirement tax questions
@DBLDAM wrote:
I took out 95,000 for covid but I am also over 65 in 2020 and 67,000 for my wife. I paid the 10% taxes and spread it out over 3 years. This year I see after the got the 8915E available and entered the data my taxes went way up, over 12,000. How can this be if I already paid the early distribution in 2020?
All the federal income taxes withheld on the distribution in 2020 were entered on the 2020 tax return as a tax payment and included in the 2020 tax refund you received.
The federal taxes withheld are not spread over three years, only the amount distributed. The 2nd year payment for the distribution is entered on your 2021 tax return Form 1040 on either Line 4b or 5b as ordinary income and taxed at your current tax rate.
March 30, 2022
8:54 AM