Turbotax asked me a lot of questions as if I were withdrawing from my 401K/IRA but it comes from my military retirement and I already paid $1,503 and $1,152 in federal and state taxes.
Yes, that's the proper spot to enter it. There is one of the Follow-up questions that asks you if it was a Qualifed or Non-qualified retirement account....military 1099-R from DFAS is Non-qualified..
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Other than that, No way for us to know for sure, since we can't see what other income you entered..
Like........what is your taxable income in line 15 of the form 1040. IF you consider ALL your income, the 8% federal tax withholding may not be enough to cover the tax on the $17,983 if you are in a tax bracket in the >20% area. AND more income can reduce other credits too.
Just make sure you enter all the boxes on your 1099-R into the same boxes on the Software form....especially the prior withholding $$.
And when you enter one taxable transaction, you can't just watch the monitor. You increased your overall adjusted gross income and with that come many other changes in your return, not just the incremental tax on the one transaction.
Sounds like you didn't have enough withholding taken out. We have a progressive tax system. The more income you have the higher the tax rate is. And by increasing your income you may have lost some credits.
Now, there was a bug earlier this year, that "might have" attached a 10% penalty to the military retirement distribution....but just for a person who turned 59.5 years old in 2020, and only if they answered one of the follow-up questions in a certain way.
I have no idea if that's been fixed yet.