IRA withdraw already paid tax, Turbo Tax is taking taxes out again

[sara-hoffman29]

My husband did a total distribution on an IRA and paid 35% federal tax at the time of the distribution.  Turbo Tax is taking an additional 25% out.  How do I get around that?

[jerry2000 · Accepted solution]

The amount withheld from your distribution was only an estimate, just like withholding from your paycheck. The exact amount of tax is not known until you prepare your tax return, because it depends on how much other income you have. The distribution is added to your other income  and taxed at whatever your marginal rate is, and the early withdrawal penalty is added, if appropriate. The total amount of added tax may be more or less than what was withheld. You get full credit for the tax that was withheld at the time of withdrawal. You aren't being taxed again, just once accurately.