Hi TurboTax experts!
For the first time ever, I have "penalty on early withdrawal of savings" on my taxes.
I did not withdraw money from my retirement accounts. I did the usual backdoor Roth IRA conversion from Traditional IRA and a mega backdoor 401k conversion: The first does not show taxable amount in 4b of 1040, and the latter marked as ROLLOVER in 5b.
Any guidance on why do I have an early withdrawal penalty?
Thank you for your guidance!
If the penalty was asserted with respect to the transactions you are stating above:
If you're under the age of 59½, you typically have to pay a 10% penalty on the amount withdrawn. The IRS does allow some exceptions to the penalty, including: Total and permanent disability. Unreimbursed medical expenses (greater than 7.5% of adjusted gross income).
Click here for additional information on managing your retirement account and taxes.
Click here for additional information on Early Withdrawals from your 401-K.
Click here for exceptions to the penalty for early withdrawal.
Where does it say early withdrawal of SAVINGS? Maybe it's for something else. Did you cash in a CD early? That would be on a 1099INT box 2. And it would be an adjustment to income not a penalty you have to pay.
@LindaS5247 But, I did not withdraw. It was contributions that were converted into Roth, no withdrawals.
@VolvoGirl Thanks for pointing it out. Totally forgot that I broke a CD. Definitely that adjustment. Thank you!