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Level 3
posted Jan 30, 2023 2:39:41 PM

Taxes for distribution from Fidelity traditional IRA

In 2022 I made a distribution of $10,000 from my traditional IRA; Fidelity at the time defaulted to taking out $1,000 for federal taxes and $100 for California state taxes, now reflected in a 1099-R. But isn't this just estimated taxes, so how does Turbotax know what to do?

 

The distribution comes from a  cash drawer with the Fidelity IRA account, which in return is fed by say the sale of stocks. Does the 8949 tax form come into play here?

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1 Replies
Level 15
Jan 30, 2023 2:42:29 PM

TurboTax software knows to put the federal income taxes withheld on the Form 1099-R as a federal tax payment on the federal tax return and the state income taxes withheld on the state tax return as a state tax payment.