The withholding done may not have been enough. As long as you have the withholding in box 4 of the Software 1099-R form, it is being considered.
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Example: Person withdraws 40,000 with 20% (8,000) withholding. Early withdrawal. If that extra income happens to be in the 25% bracket on you tax file at tax time, you will still owe another 5% in taxes PLUS the 10% penalty...or... $6,000 more.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
