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jkuykendall34
New Member

Withdrew my 401k early and withheld 30 percent(10 for penalty and 20 to cover taxes). My husband and I made 38k last year(not including the 18k withdrawal) and when typed it is says I owe an additiona

 
4 Replies
MichaelL1
Level 15

Withdrew my 401k early and withheld 30 percent(10 for penalty and 20 to cover taxes). My husband and I made 38k last year(not including the 18k withdrawal) and when typed it is says I owe an additiona

If this is your total income, the 401K then had enough money withheld on it.

First double check the entry and make sure box 4 of the 1099R has approx. $5,400 in TurboTax as this is 30% of $18,000.  Only entry what is on the 1099R however.

You should be in the 15% tax bracket plus the 10% penalty would total 25%.  I want you to see the amount in box 1, and box 4 and post a comment to me.

The issue could be that not enough taxes were withheld from the other income, or there are some credits or deductions that are impacted by the additional income.  Earned Income credit can go away when income gets above the limits.

Please check this over so I can help.  Thank you. 

jkuykendall34
New Member

Withdrew my 401k early and withheld 30 percent(10 for penalty and 20 to cover taxes). My husband and I made 38k last year(not including the 18k withdrawal) and when typed it is says I owe an additiona

Thanks for the response. Box 1 18438.58 and box 4 3687.72 which is would only be 20%. I assumed that was just listing the additional amount I withheld since the penalty is a fixed rate so just wasn’t listed, and when I filled out my withdrawal form it already accounted for withholding 10 percent and then asked what I wanted to additionally withhold, I worked for the FAA so it was a Thrift Savings Account(tsp) not an official 401k but my understanding is they work the same. I’d have to go to the bank to get statements for it but I’m 100 percent positive I only received approximately 13k back which would be about 70%. Side note from that though is if I withheld just 20% wouldn’t they still only need an additional 5% not 10? Or is it taxed in the next bracket and counted as income? I guess the point of asking is if everything was done correctly and the 1099r is wrong and I did withhold 30% should I be even?
jkuykendall34
New Member

Withdrew my 401k early and withheld 30 percent(10 for penalty and 20 to cover taxes). My husband and I made 38k last year(not including the 18k withdrawal) and when typed it is says I owe an additiona

Thanks for the response. Box 1 18438.58 and box 4 3687.72 which is would only be 20%. I assumed that was just listing the additional amount I withheld since the penalty is a fixed rate so just wasn’t listed, and when I filled out my withdrawal form it already accounted for withholding 10 percent and then asked what I wanted to additionally withhold, I worked for the FAA so it was a Thrift Savings Account(tsp) not an official 401k but my understanding is they work the same. I’d have to go to the bank to get statements for it but I’m 100 percent positive I only received approximately 13k back which would be about 70%. Side note from that though is if I withheld just 20% wouldn’t they still only need an additional 5% not 10? Or is it taxed in the next bracket and counted as income? I guess the point of asking is if everything was done correctly and the 1099r is wrong and I did withhold 30% should I be even?
MichaelL1
Level 15

Withdrew my 401k early and withheld 30 percent(10 for penalty and 20 to cover taxes). My husband and I made 38k last year(not including the 18k withdrawal) and when typed it is says I owe an additiona

TSP will be same as 401K, and your net amount would be the amount from box 1 less box 4 and box 12 (state taxes withheld) if any.   You should go to TSP website and check the history and it should show you the amounts.   then if unsure, call the TSP and go over with them.  If the 1099R is incorrect they should issue you a new one.
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