I'm doing a withdrawal as a first time homebuyer and I am under the impression that I will not be charged penalties and fees since it's being used towards a home. However my account is suggesting a 10% tax withholding. If I choose to do this and I'm not going to get taxed, do I get it back in my end of year refund?
For a first time homebuyer you can withdraw from an IRA up to $10,000 and not incur a 10% early distribution penalty. However, the amount withdrawn is still taxable income to be reported on your tax return.
The recommendation for tax withholding is good advice.