I would like more info on this also. I will probably call the IRS before e-filing with Turbotax. The withdrawal was 3322 and 664 federal withheld which is 20%. Turbotax software says I now owe another 10%, 332, in taxes. I don't think this is right because an article at the link below says this,"That penalty is on top of income taxes that need to be paid on a withdrawal. For someone in the 15 percent tax bracket, the added penalty could mean a QUARTER of the amount withdrawn will be eaten up by taxes and the penalty." This statement is correct because 10+15 is 25(quarter), so why is TT taking an additional 10% if the person knows that the 10% penalty plus his/her tax bracket is less than this?
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