When/how do I pay the 10% penalty for 401k withdrawal?

[MinhT · Accepted solution]

The 10% tax penalty for early withdrawal from your 401(k) is calculated by TurboTax and included in the amount of tax due or refund.

You just need to enter your form 1099-R correctly and answer the questionnaire about the form 1099-R in TurboTax.

[hmausten]

Does turbo tax know when you are not suppose to be penalized?

[flohernandez]

Were do i enter 1099 R

[rize4god88]

Do you receive a notice of some sort indicating when the penalty has been paid? Having a hard time understanding when and how the payment of the penalty is made since it's not automatic.

[MinhT]

The payment of the penalty is included in the amount of tax due or refund. There is no separate notice.

[RPS]

I know its a year later but all Turbo did this year was to advise the amount of the penalty. It did not include it in the amount of the IRS tax I owed. 

[MaryK4]

Unless you indicated that you qualified for an exception for the early withdrawal penalty, TurboTax would create a Form 5329 to include the penalty on your tax return automatically.  @RPS

[HDFatboy]

Nobody at Intuit will talk to me, so I’ll take my 2022 tax forms to a CPA to correct an issue TurboTax caused and then sue Intuit to get restitution for any upcoming IRS penalties.

I took an early 401k distribution and entered the 1099-R form and it eventually gave me the screen message that my “extra tax bill would be $xxxxx”.  Ok, that is fine and knew that was coming.  However, after doing all the reviews and it saying everything was good, I found that TurboTax did not file the Form 5329 so it did not actually send in the early withdrawal penalty with my payment.

Now I have to deal with this BS.  Never again Intuit!  Never again!

[VolvoGirl]

You don't need form 5329 if you are only reporting the 10% Early Withdrawal Penalty.  Didn't the additional tax show up on Schedule 2 line 8 which goes to 1040 line 23?  See the line right above Part 1on 5329

https://www.irs.gov/pub/irs-pdf/f5329.pdf