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dorygirl
New Member

Because i took money from my 401k, it says my extra tax bill is 1790. so why is it increasing what i owe to the fed an extra 4k. wouldnt it just increase by the 1790?

 
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2 Replies

Because i took money from my 401k, it says my extra tax bill is 1790. so why is it increasing what i owe to the fed an extra 4k. wouldnt it just increase by the 1790?

We don't know exactly what screen you are looking at

.....BUT....if it's the screen I "think" you are seeing...

 

If you were under age 59.5 when you took the distribution, there is one screen that shows the 10% penalty amount that is being assessed if you didn't roll the funds into another Retirment account within 60 days of distribution.   Thus, if you took 17,900 from your 401k, the software is just telling you that 1790 "extra" is being added to your tax liability. 

 

Then you also owe regular income taxes on that distribution...so, if your entries so far, put you in the 12% tax bracket:

 

17,900 x 0.12 = 2148

2148 + 10% penalty = 2148 + 1790 = 3948  =  Approx 4k

 

_____________________

But that's just a guess as to what screen you are looking at

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

Because i took money from my 401k, it says my extra tax bill is 1790. so why is it increasing what i owe to the fed an extra 4k. wouldnt it just increase by the 1790?

You always owe regular income tax on the withdrawal from a pretax 401(k). You may also a 10% penalty if you are under age 59 1/2, or if you are separated from service with the company and under age 55.

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