Early withdrawl of $7143,56 from a Roth IRA before I turned 59 1/2. What happened to the $1200 that was withheld by the custodian? Why do I owe $714 additional taxes?

Ken-J · ‎June 4, 2019

I understand there was a 10% penalty ($714), but the $1200 should have included $486 in withheld taxes after that penalty. Is that sent to the IRS, or do I have to recover that from the custodian?

dmertz · ‎June 4, 2019

The money withheld for federal taxes and shown in box 4 of the Form 1099-R gets added to your withholding from all other sources and applied as a credit on Form 1040 line 64 or Form 1040A line 40 against your overall tax liability. Similarly, state taxes withheld get applied as a credit against your state tax liability.

You have a balance due when your overall tax liability exceeds your total of withholding and estimated tax payments.

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Early withdrawl of $7143,56 from a Roth IRA before I turned 59 1/2. What happened to the $1200 that was withheld by the custodian? Why do I owe $714 additional taxes?

Retirement tax questions