topic In Turbo Tax's review, it is showing a $1 penalty for "Early withdrawal penalty deduction." Is there a way to correct this, as I did not make any withdrawal? in Retirement tax questions

In Turbo Tax's review, it is showing a $1 penalty for "Early withdrawal penalty deduction." Is there a way to correct this, as I did not make any withdrawal?

jake-seijas — Wed, 17 Mar 2021 16:59:18 GMT

I need to remove this, since this $1 item the system added now forces me to pay $80 to file my taxes.

Re: In Turbo Tax's review, it is showing a $1 penalty for "Early withdrawal penalty deduction." I...

ColeenD3 — Wed, 17 Mar 2021 17:47:14 GMT

Did you enter a 1099-R? If so, what was the code? Or, did you pull your money out of a CD early? It would be in Box 2 of your 1099-INT.

Re: In Turbo Tax's review, it is showing a $1 penalty for "Early withdrawal penalty deduction." I...

jake-seijas — Wed, 17 Mar 2021 18:23:59 GMT

Thanks, Coleen. Very helpful. I erroneously entered a small figure in box 2 on the 1099-INT that caused the issue.

Re: In Turbo Tax's review, it is showing a $1 penalty for "Early withdrawal penalty deduction." I...

JoannaB2 — Wed, 17 Mar 2021 18:51:09 GMT

Yes, if no withdrawal was made or didn't receive 1099-R, the form needed to be deleted. To delete a form 1099-R, if needed:

In Tax Home Screen, click Tax Tools, then Tools.
Under Tool Center, click delete a form.
Under Review Form List, scroll down and delete the form, 1099-R.

Interest income is entered on form 1099-INT. You may have to go back to the form 1099-INT and delete the amount on box 2.

The Form 1099-R is used to report profit-sharing or retirement plans, IRA's, annuities, pensions, insurance contracts, and other qualified retirement plans.

The Form 1099-INT is a form for interest income reported by financial institution. The income is reported on Box 1 and Box 2 is early withdrawal penalty.