Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
pliptak
New Member

10% early withdrawal

Is the 10% withdrawal penalty factored into my taxes and paid at the same time taxes are paid, or is it something the IRS requests later down the road? I did my taxes using turbo tax premier, put in all the information including the 1099 and it did include the additional amount of withdrawal (so that I was taxed on the additional income) Everything seemed to go fine, I filed and the IRS accepted it,  but just want to be sure I don't get a big surprise of having to pay that 10% penalty separately at some point.

1 Best answer

Accepted Solutions
MinhT
Expert Alumni

10% early withdrawal

Yes, you are correct. If you have to pay the 10% early withdrawal penalty \, TurboTax has already calculated it and included it the amount of tax due. You do not have to pay it separately. You can check it by looking at form 5329 which should be included in your tax return.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

3 Replies
MinhT
Expert Alumni

10% early withdrawal

Yes, you are correct. If you have to pay the 10% early withdrawal penalty \, TurboTax has already calculated it and included it the amount of tax due. You do not have to pay it separately. You can check it by looking at form 5329 which should be included in your tax return.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

melissapruitt
New Member

10% early withdrawal

I thought in 2020 the 10% penalty for any withdrawal was waived.

LinaJ2020
Expert Alumni

10% early withdrawal

Yes, if it is Covid-related, the 10% is waived on the early distribution. 

 

The 8915-E Form is projected to be e-fileable starting 02/26/2021.  Please click on the following link and sign up for an email notification when the form is finalized.

 

Form 8915-E

 

If you are under age 59 1/2, the distribution from the retirement plans and IRAs is considered as an early withdrawal.  Generally, you will pay both regular tax plus an additional 10% penalty of your entire distribution unless you met certain criteria.  Due to the CARES Act, if your retirement distribution is related the Covid-19, you will not be liable for this additional penalty.  You will still pay the normal taxes like your wages and income.  For more information from the IRS, click here: Covid Relief.  If your distribution is not related to the Covid, you will need to pay the penalty

 

@melissapruitt

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Dynamic AdsDynamic Ads
Privacy Settings
v