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Retirement tax questions
Most of the time, if you make an early withdrawal from an IRA, there is a mandatory 20% federal withholding. It's not always taken out, and if you contact the trustee, you may be able to increase the federal withholding and add state withholding. (You have to ask them.) Alternatively you could make an estimated payment with the IRS at <a rel="nofollow" target="_blank" href="http://www.irs.gov/payments">www.irs.gov/payments</a>. Your state likely also accepts online estimated payments.
Your actual tax due is calculated with your overall wages, income and deductions for the year. You get credit for the withholding along with any withholding from wages and any estimated payments. If you made more payments than you owe, you get a refund. If your tax is more than your payments and withholding, you owe a tax payment with your tax return.
You may owe a penalty for late or under-payment if you owe more than $1000 with your tax return, unless the amount of your payments into the system (via withholding and other payments) are at least as much as last year's tax bill or at least 90% of the tax due this year. If you set the money into a savings account instead of making estimated payments, you will want to review your payment situation to make sure you won't owe a penalty.
<a rel="nofollow" target="_blank" href="https://www.irs.gov/taxtopics/tc306">https://www.irs.gov/taxtopics/tc306</a>
Your actual tax due is calculated with your overall wages, income and deductions for the year. You get credit for the withholding along with any withholding from wages and any estimated payments. If you made more payments than you owe, you get a refund. If your tax is more than your payments and withholding, you owe a tax payment with your tax return.
You may owe a penalty for late or under-payment if you owe more than $1000 with your tax return, unless the amount of your payments into the system (via withholding and other payments) are at least as much as last year's tax bill or at least 90% of the tax due this year. If you set the money into a savings account instead of making estimated payments, you will want to review your payment situation to make sure you won't owe a penalty.
<a rel="nofollow" target="_blank" href="https://www.irs.gov/taxtopics/tc306">https://www.irs.gov/taxtopics/tc306</a>
‎June 6, 2019
6:08 AM