1099-R question

[tmiller1185]

Hello. My wife and I made a terrible mid-2024 mistake of withdrawing from our 401K.  We were in bad financial shape at the time and now regret the decision, especially right now when preparing our 2024 tax return.  But here we are.  The withdrawal amount was $150,000, with $15,000 withheld.  Before entering the 1099-R info into Turbo Tax, our federal amount due is $53,000.  Once we enter the 1099-R, the amount due jumps to $98,000.  I know it's likely correct, but I wanted to see if someone could confirm.  I know there are likely numerous factors involved, specifically our income, but my simplified look is we took out $150,000, minus the $15,000, now minus another $45,000.  So essentially, it costs us $60,000 to withdraw $150,000.  Again, we already know it was a bad financial decision, I just want to make sure we are not missing something. Thank you in advance!

[SharonD007]

When you make an early withdrawal without an exception from your retirement account before age 59 1/2, you pay a 10% early withdrawal penalty plus the income taxes on the full amount of your withdrawal (which is the entire $150,000).

We can't figure out your tax liability without the details on your tax return in this forum but i can tell you the 10% penalty on your $150,000 withdrawal is $15,000. The income tax on the $150,000 withdrawal depends on the tax bracket that you're in. If you live in a federally declared disaster area, the 10% early withdrawal penalty for accounts up to $22,000 for tax year 2024 is waived.

For more information, refer to the TurboTax article An Early Withdrawal From Your 401(k) and Can I make a hardship withdrawal from my 401(k)?

Also review the TurboTax article: What is Form 5329: Additional Taxes on Qualified Retirement Plans?