SIMPLE IRA ON WITHDRAWLS? early withdraw total for both 93,025.37 paid already 16,630.56 but still have more to pay 9303. why so much more

[Lisa995]

Early withdrawals are taxed at the tax rate for the bracket your total income lands in...as well as a 10% penalty for early withdrawal.  Its quite common for the withholdings on a early retirement distribution to create a larger tax liability then the withholdings will cover.

[VolvoGirl]

That is the 10% Early Withdrawal Penalty.  It has to break out and show the 10% penalty separately on your return on line 59 and then you get credit for all the withholding taken out on Line 64.

[macuser_22 · Accepted solution]

Approximately 20% was withheld  to pay the tax.   If you are in the 20% percent marginal tax bracket, that would pay the tax.  Then the additional 10% ($9,303) penalty must be added on.    Probably you should have had 30% withheld for tax.