Why is my Federal "retirement income results" showing "tax on early distributions" when I already paid the 10% penalty at the time of withdrawal (Box4)?

[VolvoGirl]

You didn't actually pay the tax or 10% penalty (you pay a 10% early withdrawal penalty if you are under 59 ½).  You had taxes withheld like from your paycheck. You still have to enter the whole amount (before taxes were withheld) with your other income to figure out the total tax (and it may put you into a higher tax bracket)  and then the withholding is subtracted from the total tax to figure your refund or tax due.  The withholding will show up on 1040 line 16.  The 10% penalty is on 1040 Schedule 4 line 59.

It has to break out and list the 10% early withdrawal penalty separately on your return.  It's on 1040 Schedule 4 line 59. Then you will get credit for the withholding on 1040 line 16.

And it's very very common to owe more because the withdrawals increase your income and put you into a higher tax bracket. So when you add all your income for year you didn't have enough withholding taken out of the 1099Rs to cover the total tax. You owe more than they sent in for taxes.

And by increasing your income it would have changed other items on your return like make more of your SS taxable or changed the limits on your Medical deductions or employee job expenses and changed any credits you qualified for.

Ps…..you can lose up to 50% of your withdrawal to federal and state taxes and penalties.  

[taxmancometh--]

Thank you.  I am aware of the huge hit I was taking in the early withdrawal, but I needed to keep a roof over my head.  Unfortunately the government doesn't allow this as an exclusion unless I become homeless (I don't have a mortgage).  Thanks again.

[Ashby]

You withheld taxes to cover the 10% penalty on early distributions. This amount is shown in Box 4. 

The penalty gets reported on your income tax return and goes towards your total tax liability in the same way that your tax withheld from Box 4 goes towards your total withholdings.

[taxmancometh--]

I am confused as the line specifically states "early withdrawal penalty" and the amount displayed by Turbo Tax is less than the 10% that is indicated in Box 4 of my W-2.  So I don't understand where/how TurboTax figured that additional amount.