So like the title says, as I was filling out my W-2s and income and such, I also had to enter in the 401k money I had to withdraw early from an old job's account. I took the whole thing, and of course since I'm only in my 30s, I payed taxes/penalties on it. Now supposedly, according to TurboTax, I somehow didn't pay all the taxes needed and have to pay an additional 1500 if I read it correctly, however my refund amount that I am getting back did not go up or down to account for this money I owe. I am getting a decent amount back and can easily pay it if needed, but since the refund amount did not account for that, what happens next? Do I actually owe that amount or is it just stating what I could possibly owe? Don't want to get my full refund only to see months later a notice saying to pay the taxes; normally the filing process will let me know if I owe or not. The money is to be used for bills and other such housing expenses but not not sure if I can use it all.
You won't owe more later. It is all in there. What the program is telling you is that included in your tax return is the money that you owe for taking money out of your retirement plan. But it is already being paid for with the money they took out. So you don't owe anymore. As long as you typed all of the numbers in correctly then you're all set and you can spend your entire refund.
It's already included in the refund or tax due on your return.
You didn’t actually pay the tax or the 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 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/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 8 which goes to 1040 line 23). Then you get credit for all the withholding taken out on 1040 line 25b.
So, because my refund amount did not change, I am to expect that amount back and not have to pay anything extra? Or should I expect to have to pay taxes later after I get the refund?
I added the 401k near the end because I had to seek the section out later when I realized I was never asked about it. I entered in all the boxes correctly based on my 1099-R form I got. My estimated refund amount stayed the same, even though It said I owe more.
You won't owe more later. It is all in there. What the program is telling you is that included in your tax return is the money that you owe for taking money out of your retirement plan. But it is already being paid for with the money they took out. So you don't owe anymore. As long as you typed all of the numbers in correctly then you're all set and you can spend your entire refund.