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New Member
posted Apr 11, 2025 5:03:57 AM

Withdew funds from retirement for College, and witheld the 10% for Federal taxes at that time. While doing taxes it is stating we owe the same amout we withheld. why?

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1 Replies
Expert Alumni
Apr 11, 2025 5:11:44 AM

It depends.  Since owing taxes could stem from any number of things, it could be coincidental. Or, it could be that you are being penalized on early withdrawal, which is a 10% penalty.

 

Make sure you do indicate that you used the money for tuition.

 

Here's how to do this in TurboTax Online:

 

  • Navigate to Federal > Wages & Income > IRA, 401(k), Pension Plan Withdrawals (1099-R) Add/Edit
  • Your withdrawal will be shown in a summary on a screen that says "Here's your 1099-R info"
  • Choose "Continue"
  • Continue through the interview until you arrive at a screen that says "Did you use your IRA to pay for any of these expenses?"
  • Here, enter the amount of the withdrawal spent on tuition.