If I take $5,000 from a retirement fund and I send $500 to the IRS and $200 to the state, what is my income to claim?

[sceptre2017 · Accepted solution]

You would claim the entire $5,000 regardless if you sent $500 to the IRS and $200 to the state.  If the withholding from the distribution was sent to the IRS and the state via the broker, then you would get a form 1099-R which would list the distribution amount, as well as the withholding amount.  When you enter the form in the program it would account for your withholding and the distribution.  if you received all of the $5,000 distribution and paid in estimated taxes on your own, then you will received a 1099-R with the distribution listed, but not the withholding. Continue to enter the 1099-R "exactly" as it appears. However, now you would go into the Deductions and Credit Section and enter in that you paid estimated taxes.