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shimanole
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I paid 30% on a 401k early withdraw distribution. 20% toward taxes and 10% penalty. An additional 10% penalty is being adding to my return. Is that not already paid?

 
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4 Replies

I paid 30% on a 401k early withdraw distribution. 20% toward taxes and 10% penalty. An additional 10% penalty is being adding to my return. Is that not already paid?

If for 2018 taxes:

 

The pre-withholding is not a stand-alone assessment.   Your 2018 tax return will be the final accounting of  everything for the entire year.  The 20% plus 10% prepayment is just an estimate of what might be required for the tax year.

 

When you eventually prepare the year's tax forms, the 30% withholding gets applied and added to ALL your other tax withholding for the year as a total credit.   Then all your income from all sources is added together to get a total taxable income, for which the standard income tax is applied, initially ignoring the 10% penalty, and then showing the added 10% penalty on line 59 of the new 2018 Schedule 4 .  That gets added to your standard income taxes.....to show a total owed for the year.  Then the total withholding from all sources is used as a credit against that total.  

 

So it all works out properly...total withholding vs. grand total taxes and penalties assessed

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

I paid 30% on a 401k early withdraw distribution. 20% toward taxes and 10% penalty. An additional 10% penalty is being adding to my return. Is that not already paid?

It has to break out and list the 10% early withdrawal penalty separately on your return.  It's on 1040 line 59. Then you will get credit for the withholding on line 64.

You didn't actually pay the tax or 10% penalty (you pay a 10% early withdrawal penalty if you are under 59 ½).  You had taxes withheld like from your paycheck. You still have to enter the whole amount (before taxes were withheld) with your other income to figure out the total tax (and it may put you into a higher tax bracket)  and then the withholding is subtracted from the total tax to figure your refund or tax due.  The withholding will show up on 1040 line 64 (1040A line 40).   The 10% penalty is on 1040 line 59.

I paid 30% on a 401k early withdraw distribution. 20% toward taxes and 10% penalty. An additional 10% penalty is being adding to my return. Is that not already paid?

"CRUD"  a transferred file from 2016 taxes that I answered in the "Community" because it had no Comment or Answer over there......so we cannot answer anything over there....no indication of when anything is posted.

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

I paid 30% on a 401k early withdraw distribution. 20% toward taxes and 10% penalty. An additional 10% penalty is being adding to my return. Is that not already paid?

The government sure knows how to screw its citizens by combining the money you took out to live on and taxing it again at 10% with a higher gross sum. 

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