In July 2019 I was laid off by my employer. I had a 401k I contributed to from Jan-July. In Dec 2019 I rolled funds to an IRA, but I had to pay off the existing 401k loan of $22,000. I was aware that I would have to pay taxes ok this as it is considered a distribution and added to my income (even though it all went to payoff my 401k loan). As I was entering all my info in Turbo tax, it told me I was getting a refund of $6600, then when I entered $22,000 for 401k distribution it changed to owing $995 Federal & $880 state. Why does it change so drastically? I would have thought my refund would cover the taxes I owed? Is there a way to help lower this amount and/or get a tax deduction for contributions I make to my existing IRA to help offset the amount I owe? I tried entering but I think my income is too high to get a deduction (is this new for 2019)?
