401k calculation seems off

[mbodurski]

I withdrew my 401k early
I asked the financial institution to withhold 34% for federal tax (24% effective tax bracket + 10% penalty)
Now the software is telling me I need to pay another 10% penalty, that would mean I would be taxed for a total of 44% on my 401k? this doesnt seem right

[VolvoGirl]

You didn’t actually pay the tax or the 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 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 or 5a and the taxable amount on 4b/5b.  You will get credit for the withholding on 1040 line 25b.

It has to break out and show the 10% penalty separately on your return (schedule 2 line 8 which goes to 1040 line 23). Then you get credit for all the withholding taken out on 1040 line 25b.