Do we have to pay Penalty and taxes? We received a 1099-R for a gross distribution on our Roth IRA with box 2b stating: Taxable amount not determined.

lizamylove — Sat, 01 Jun 2019 20:46:49 GMT

We withdrew the money because our sons Cloverdell 529 plan's balance is only enough to pay for his rent. His tuition was due in August 2018 to the amount of $5,000 plus and the remaining we used to pay the second semester 2019

When you have early withdrawal penalties from your IRA yo...

BurakG — Sat, 01 Jun 2019 20:46:50 GMT

When you have early withdrawal penalties from your IRA you are subject to 10% additional penalty. There are ways to waive this penalty.

What you'll need to do is answer the waiver questions that TurboTax asks on the 1099-R entry screens after you input your 1099-R info (Federal Taxes > Wages & Income > Retirement Plans & Social Security > IRA, 401(k), Pension Plan Withdrawals (1099-R).

You'll first answer a variety of non-waiver-related questions before coming to the screen that says Let's see if we can reduce your early withdrawal penalty. Next you'll land on the screen asking Did you use your IRA to pay for any of these expenses, and you'll see an entry box next to Higher Education. Enter the amount of your qualified education expenses here. Again, it is unrelated to the entries for the education credits/deduction.

If the amount you enter here is less than the total distribution amount taken, then TurboTax will subtract it and you'll pay the penalty on the remainder. If the expense total is equal to or higher than the IRA distribution, then you won't pay the 10% penalty on any of it.

Lastly, you'll see the penalty calculation on Form 5329.

topic Do we have to pay Penalty and taxes? We received a 1099-R for a gross distribution on our Roth IRA with box 2b stating: Taxable amount not determined. in Retirement tax questions

Do we have to pay Penalty and taxes? We received a 1099-R for a gross distribution on our Roth IRA with box 2b stating: Taxable amount not determined.

When you have early withdrawal penalties from your IRA yo...