- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Retirement tax questions
You will get a 1099R for it.
You didn't actually pay the tax or 10% penalty (you pay a 10% early withdrawal penalty if you are under 59 ½). You had taxes withheld like from your paycheck. You still have to enter the whole gross original amount (before taxes were withheld) with your other income to figure out the total tax (and it may put you into a higher tax bracket) and then the withholding is subtracted from the total tax to figure your refund or tax due. The gross amount shows up,on 1040 line 4a and the taxable amount on 4b. The withholding will show up on 1040 line 16.
It has to break out and show the 10% penalty separately on your return, (Schedule 4 line 59 which goes to 1040 line 14)
Then you get credit for all the withholding taken out on 1040 line 16.
And by increasing your income you may have lost some credits like the EIC . You can lose like up to 50% of it for taxes and penalties for federal and state.