Solved: I went in my ira early and to they took 2000$ in taxes as penalty, will I get any of that back on my tax refund
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I went in my ira early and to they took 2000$ in taxes as penalty, will I get any of that back on my tax refund

Will I get any of the money back on tax refund, for early ira withdrawal

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Level 15

I went in my ira early and to they took 2000$ in taxes as penalty, will I get any of that back on my tax refund

When you take out a distribution from an IRA, the tax withheld is an estimated amount.  You say you took an early distribution, which means there is also a 10% penalty.  In January, you will get a 1099R for the money you took out of your IRA.

When that money is added to your other income, TurboTax will calculate whether any additional tax is owed, or if you get a refund based on any other tax withheld from wages, etc.

 Go to  Federal> Wages and Income>Retirement Plans and Social Security>IRA  401 k) Pension Plan Withdrawals to enter your 1099R.


**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

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Level 15

I went in my ira early and to they took 2000$ in taxes as penalty, will I get any of that back on my tax refund

When you take out a distribution from an IRA, the tax withheld is an estimated amount.  You say you took an early distribution, which means there is also a 10% penalty.  In January, you will get a 1099R for the money you took out of your IRA.

When that money is added to your other income, TurboTax will calculate whether any additional tax is owed, or if you get a refund based on any other tax withheld from wages, etc.

 Go to  Federal> Wages and Income>Retirement Plans and Social Security>IRA  401 k) Pension Plan Withdrawals to enter your 1099R.


**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

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Level 6

I went in my ira early and to they took 2000$ in taxes as penalty, will I get any of that back on my tax refund

The $2,000 is federal withholding and whether you will receive a refund depends whether this is sufficient to cover the tax on your withdrawal and the 10% penalty. You'll only know when you complete your tax return.

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Level 15

I went in my ira early and to they took 2000$ in taxes as penalty, will I get any of that back on my tax refund

If the gross distribution was $20,000 and they withheld the default 10%, $2,000, the withholding will only be sufficient to cover the penalty.  The $20,000 will be added to your other taxable income, so this distribution will likely increase the amount of your income tax liability and you may have a balance due.  But as TurboTaxMinhT indicated, you won't know until you complete your tax return.  Your tax return will show your early distribution penalty on Form 1040 line 59, your overall tax liability including the penalty on line 63 and the $2,000 of tax withholding with be included as a credit on line 64 to be subtracted from the amount on line 63.
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