I took out a certain amount of money early from my IRA so i expected to pay the 10% for taxes due, however the amount due is much higher then 10%, does anyone know why?

posted

The 10 percent is only the early distribution penalty, it is not the total tax amount for the IRA distribution. The amount of the distribution is also added to your other income and taxed at your ordinary income tax rate.

So, if this was not taken into account and the amount of the distribution is significant without any income tax withheld, it can be an unexpected impact on your return.

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