topic Will I have to pay an extra tax on an annuity distribution if I already paid it when the funds were distributed? in Retirement tax questions

Will I have to pay an extra tax on an annuity distribution if I already paid it when the funds were distributed?

jaxg13 — Mon, 23 Feb 2026 09:35:27 GMT

The turbotax system is saying I owe an extra 10%

Re: Will I have to pay an extra tax on an annuity distribution if I already paid it when the funds were distributed?

Texas Roger — Tue, 31 Jan 2023 20:42:15 GMT

What you paid when you took the withdrawal was a set amount or an estimate of what taxes might be. The actual amount of taxes on the distribution are calculated along with your other income when you file your tax return. It is often more than the amount withheld with the distribution.

Make sure all your entries are correct and all the questions answered correctly. If they are, then the 10% is the additional tax you owe.

Re: Will I have to pay an extra tax on an annuity distribution if I already paid it when the fund...

JulieS — Tue, 07 Feb 2023 14:56:00 GMT

Yes, you may have an additional 10% tax on this distribution if the annuity is a qualified annuity and you are under 59-1/2.

Texas Roger is correct that the amount withheld is just an estimate of the taxes on the distribution, and you may owe more or less when you file your return, but you may also have a 10% penalty if this is considered an early distribution from a retirement plan.

If you took a distribution from your 401(k) or another qualified retirement plan (excluding IRAs) before you turned 59 1/2, you'll pay a 10% early withdrawal penalty, with a few exceptions:

Death, or total and permanent disability
Qualified Domestic Relations Order
Series of substantially equal periodic payments based on life expectancy
Dividend pass through from an ESOP
IRS levy
Unreimbursed medical expenses that are more than a certain amount of your adjusted gross income
Certain distributions to qualified military reservists called to active duty
Separation from Service if age requirement is met

Once you enter the distribution information from your 1099-R form, TurboTax will help you check for any exceptions that could reduce the tax