I took out my total pension from Time Warner Cable and ask them to take out the 20% for taxes, and now turbo tax is saying I my owe more taxes. How can that be?

[VolvoGirl]

Was it a 401K?  What code is in box 7 on the 1099R?  It probably pushed you into a higher tax bracket.

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 gross original 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 gross amount shows up,on 1040 line 4a/4c and the taxable amount on 4b/4d.  The withholding will show up on 1040 line 17.

It has to break out and show the 10% penalty separately on your return, (Schedule 2 line 6 which goes to 1040 line 15)

Then you get credit for all the withholding taken out on 1040 line 17.

And by increasing your income you may have lost some credits like the EIC .  You can lose like up to 50% of it for taxes and penalties for federal and state.

[Critter-3]

Correct ... they withheld 10% for the penalty & 10% for the taxes which is almost never enough but it is the minimum allowed.   So if you are in the 20% tax bracket then 10% was not enough ... review the return to see why.