How do I make sure the Fed. income tax withheld already applied to my tax deduction?

[ycouyang]

I withdrawal some of my 401k early in 2020 due to a family emergency, and at the time for withdrawing, I also did the tax withheld about 20% of my withdraw amount (paid to IRS). However, when I filled in the 1099-R both item 1 "gross distribution" and item 4 "Fed. income tax withheld". But to my surprise, the tax I owned is still very high (seems like the tax withheld was not applied yet). How could I verify that TurboTax already counted and deduce the 1099-R tax withheld from the final tax amount?

Many thanks for your help.

[VolvoGirl]

The withholding will be on 1040 line 25b.

You didn't actually pay the tax or 10% penalty (you pay a 10% early withdrawal penalty if you are under 59 ½).  You had taxes withheld like from your paycheck. You still have to enter the whole gross original amount (before taxes were withheld) with your other income to figure out the total tax (and it may put you into a higher tax bracket) and then the withholding is subtracted from the total tax to figure your refund or tax due. The gross amount shows up,on 1040 line 4a or 5a and the taxable amount on 4b or 5b.  The withholding will show up on 1040 line 25b.

It has to break out and show the 10% penalty separately on your return, (Schedule 2 line 6 which goes to 1040 line 23).  Then you get credit for all the withholding taken out on 1040 line 25b.

And by increasing your income you may have lost some credits like the EIC .  You can lose like up to 50% of it for taxes and penalties for federal and state.