How do I pay my penalty (10%) for an early 401k withdraw before I file my 2019 taxes?

[Carl]

If you made the withdrawal in 2018, then the administrator was required by law to withhold a minimum of 10% for taxes. If it was an early withdrawal they were required to withhold an additional 10% for the penalty. So just enter the 1099-R exactly as printed and don't be surprised if you owe additional tax on that money since I doubt the 10% tax withholding was enough.
To pay anything you may owe to the IRS, you can do so online at <a rel="nofollow" target="_blank" href="http://www.irs.gov/payments">http://www.irs.gov/payments</a>.

[janie-palm]

Thanks for the quick response, the withdrawl was made in 2019.  Do I submit an estimated payment form with my payment or is there some other type of form?  Or do I have to wait to get something from the plan administrator (1099-R) and pay the penalty when I file my 2019 taxes, which I prefer not to do.

[VolvoGirl · Accepted solution]

Go to https://www.irs.gov/payments and make an estimated payment.  See screen shot.  But pick year 2019

[janie-palm]

Thank you!!!

[Carl]

Then this has nothing to do with your 2018 taxes. However, if you withdrew a large amount in 2019 and it was an early withdrawal, the plan administrator has at a minimum (as required by law with a 401(k)) withheld 10% for taxes and if an early withdrawal, an additional 10% for the penalty. So figure the penalty is paid.
Then look at your tax bracket for 2018. If you're in the 22% bracket for example, then 10% is already paid and you can go ahead and send the IRS an additional 12% if it makes you feel more comfortable on that front. You can even pay online at www.irs.gov/payments. Just make it a 1st quarter 1040-ES payment and you're good. Remember to print your receipt when done. As always, when dealing with the IRS don't forget the three golden rules:
1) You are guilty until proven innocent.
2) The burden of proof is on the accused (that would be you!) and not the accuser.
3) If it's not in writing, then it flat out, no way, no how, did not occur.
Finally, if your state taxes personal income then you may need to pay additional tax to your state too. How you do that depends on your state. But you should be able to find out at your state's department of taxation website.

[Vanessa]

You can use this link to pay the IRS online. https://www.irs.gov/payments/direct-pay

Or page 5 of the following link will give you the mailing address based on your location. https://www.irs.gov/pub/irs-pdf/f1040es.pdf

[CarloP]

I overcontributed to my ROTH IRA in 2018 and requested a refund of excess contributions. I just received my 1099-R in 2020. So, I am amending my 2018. I am using H&R Block, which hopefully is somewhat similar to TT. Since this was a return of contributions for 2018 received in 2019, it tells me NOT to include the 1099-R info in "Retirement Income", and instead enter it in "OTHER" income. Here it clearly prompts me to include return of contributions made in 2019 and received in 2020. I did that, showing the total withdrawal as well as the taxable earnings. When I get to the IRA contributions page, it clearly tells me that the earnings will be taxable and that I will be subject to a 10% early distribution  penalty because I am under age 59 1/2. No problem so far.  Then it asks if the withdrawal was covered by any of the typical exceptions. I checked the NO box. Still, no matter what I do, it tells me that my penalty is 0.00.  I know that I need to pay takes on the earnings and should be subject to the 10% early distribution penalty. But it excludes it under FORM 5329 Part I, line 2. So the penalty is zero.  How do I need to do to get it to calculate the 10% penalty?  Thanks!!

[DianeC958]

The 1099-R you received for the over contribution needs to be entered as a 1099-R, this will have the program calculate the 10% penalty for early distribution.

The only part of your distribution that would receive the 10% penalty is the amount of earnings on the excess contribution.  Since it you are removing the over contributed amount from a Roth account the amount you contributed to the Roth account is not taxable when you remove it.

@CarloP