To avoid pro rata rule implications as we started doing backdoor roths in 2025, I withdrew all of a small traditional ira my wife's past job's 403b had converted to.
The total amount withdrawn from the trad IRA was $1,030.61.
Federal income tax withheld at the time was $103.06 (10%).
Box 7 distribution code is 1.
My understanding is that I am to pay a 10% penalty on the whole withdrawn amount since it was all tax deferred money which would be $103.06 in addition to regular income taxes on the withdrawal.
However, Turbotax is calculating my early withdrawal penalty at $13 (Schedule 2, line 😎 and I do not understand why.
Can someone please help me fix this? It won't let me manually change the amount to correct penalty I should pay which I believe should be $103.06.
