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Ken-J
New Member

Early withdrawl of $7143,56 from a Roth IRA before I turned 59 1/2. What happened to the $1200 that was withheld by the custodian? Why do I owe $714 additional taxes?

I understand there was a 10% penalty ($714), but the $1200 should have included $486 in withheld taxes after that penalty.  Is that sent to the IRS, or do I have to recover that from the custodian?
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Accepted Solutions
dmertz
Level 15

Early withdrawl of $7143,56 from a Roth IRA before I turned 59 1/2. What happened to the $1200 that was withheld by the custodian? Why do I owe $714 additional taxes?

The money withheld for federal taxes and shown in box 4 of the Form 1099-R gets added to your withholding from all other sources and applied as a credit on Form 1040 line 64 or Form 1040A line 40 against your overall tax liability.  Similarly, state taxes withheld get applied as a credit against your state tax liability.

You have a balance due when your overall tax liability exceeds your total of withholding and estimated tax payments.

View solution in original post

1 Reply
dmertz
Level 15

Early withdrawl of $7143,56 from a Roth IRA before I turned 59 1/2. What happened to the $1200 that was withheld by the custodian? Why do I owe $714 additional taxes?

The money withheld for federal taxes and shown in box 4 of the Form 1099-R gets added to your withholding from all other sources and applied as a credit on Form 1040 line 64 or Form 1040A line 40 against your overall tax liability.  Similarly, state taxes withheld get applied as a credit against your state tax liability.

You have a balance due when your overall tax liability exceeds your total of withholding and estimated tax payments.

View solution in original post

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