dmertz
Level 15

Retirement tax questions

"it was still money taken from me"

 

No, it was a tax paid by your IRA, reducing the balance in your IRA, not paid by you.  Your IRA is not you, it's a separate entity, even though it's owned by you.  Because you are not the one paying the tax, you don't get any credit on your personal tax return.  The payment of the tax is simply an expense of the IRA that reduces the balance in the IRA.

 

An IRA is a tax-exempt trust.  However, despite normally being tax-exempt, tax-exempt trusts are subject to taxation on income that comes from unrelated business activity and the trust is the entity that owes and pays the tax.  You do not personally pay the tax and are not personally responsible for paying this tax (except, perhaps, if you've taken distributions from the IRA such that the amount remaining in the IRA is insufficient to pay the tax).