How to file for pre paid tax distribution from ira

[MichaelL1 · Accepted solution]

Pre paid I assume means taxes were taken out when distribution was made.

If so, just enter the 1099R exactly as received.  It has taxes withheld on it, so you will get credit for those taxes withheld. 

If you are under 59 1/2 and do not meet an exception these is a 10% early withdrawal penalty.  So for example if you are in the 25% tax bracket, you would pay income tax of 25% on this withdrawal plus the 10% penalty and then get credit for taxes paid in when the distribution was taken.

This is very similar to a pay check as taxes are taken out throughout the year, and then you file your return with the W-2.

 To enter pension and annuity Payments (1099-R)

• Click on Federal Taxes
• Click on Wages and Income 
• Click on I'll choose what I work on (if shown)
• Scroll down to Retirement Plans and Social Security
• On IRA, 401(k), Pension Plan Withdrawals (1099-R), click the start or update button
• Enter the 1099 with all the boxes completed and then answer all the questions following the 1099R entry.