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Returning Member
posted Apr 11, 2021 11:09:30 PM

I prepaid the IRS tax penalty on a 401k early withdrawal. Where do I enter that in Turbotax? I got to the point of "file" and it has not given me a chance to enter it.

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8 Replies
Expert Alumni
Apr 12, 2021 5:42:41 AM

Any withholding from a withdraw are included on you 1099-R in box 4.  Did you include this amount when you entered the 1099-R?

Returning Member
Apr 12, 2021 8:23:02 AM

Yes, the standard withholding is on the 1099r and entered in Turbotax, but the 10% early penalty is not anywhere in there.

Expert Alumni
Apr 12, 2021 9:31:55 AM

All the tax withheld from your distribution is entered in box 4 of your form 1099-R. There is no special box on form 1099-R for the 10% early withdrawal penalty. If you did not request an extra withholding from the plan administrator prior to the distribution, then the penalty is not withheld and you have to pay it at tax time.

Returning Member
Apr 12, 2021 9:38:00 AM

You are right, the penalty was not withheld.  I prepaid the penalty with the IRS after got the disbursement.  Turbotax wants me to pay the penalty again because I can't find where to enter that I already paid it.

Expert Alumni
Apr 12, 2021 9:50:01 AM

Enter the tax penalty you paid as an estimated payment, using these steps:

  1. Click on FederalDeductions & Credits. 
  2. In the Estimates and Other Taxes Paid section, click on the Start/Update box next to Estimated Tax Payments
  3. On the next screen, click the ​​​Start/Update box next to Federal estimated taxes for 2020(Form 1040ES).
  4. On the screen, Did you pay estimated taxes for 2020? click the Yes box.
  5. Enter your payment(s) on the next screen, How much did you pay in federal estimated taxes? 
  6. If you made more than four payments, click Add another payment at the bottom of the screen to add another line.
  7. You will be brought back to the Estimated Taxes screen.  If you also made state estimated tax payments, click the Start/Update button next to State estimated taxes for 2020.
  8. On the screen, Did you pay state estimated taxes for 2020? click the Yes box.
  9. Enter your payment(s) on the next screen, How much did you pay in state estimated taxes? 

Returning Member
Apr 12, 2021 9:52:25 AM

Does that work if it was just one payment, and not four payments?

Level 15
Apr 12, 2021 9:53:42 AM

FYI - It will still break out and show the 10% penalty separately on your return (schedule 2 line 6 which goes to 1040 line 23). Then you get credit for all the withholding taken out on 1040 line 25b and the estimates you paid on line 26.

New Member
Feb 26, 2022 12:29:30 PM

Thank you! Thank you! Thank you!