I had a federal tax withholding reported on my 1099-R but turbo tax still report this amount as a tax due, "Based on your entries, your extra tax bill is $1000"

[jerry2000 · Accepted solution]

The amount withheld from your distribution was only an estimate, just like withholding from your paycheck. The exact amount of tax is not known until you prepare your tax return, because it depends on how much other income you have. The distribution is added to your other income  and taxed at whatever your marginal rate is, and the early withdrawal penalty is added, if appropriate. The total amount of added tax may be more or less than what was withheld. You get full credit for the tax that was withheld at the time of withdrawal. You aren't being taxed again, just once accurately.

[notmandy]

I'm in a similar situation, and Turbo Tax has said that my extra tax bill is about 2,800. But now, as I'm filing, I'm also showing a refund of 3,330. Is Turbo Tax taking this money out and then calculating my refund? Or is this amount that I still owe separate from that? I cannot tell if TT has already calculated my 2,800 extra tax bill into my 3,330 refund??