IRA

[Coach1122]

First time working with Turbo Tax.

Program trying to charge me 10% of IRA.  I'm 66 years old.  Help!  What do I do?

[DavidS127]

Unless your IRA has engaged in a prohibited transactions described at this IRS link you should not be paying the 10% additional tax.  

Check the distribution code in box 7 of the 1099-R, if it is Code 1 (early distribution) instead of Code 7 (normal distribution) you should ask for a corrected 1099-R.  Also, make sure you entered the correct box 7 code in TurboTax and answered all the questions in the interview section.

Also note that the regular tax rate on the first few thousand of taxable income is 10%.  If you were in that tax bracket at the time the Form 1099-R was entered, your regular tax would have increased by 10% of the distribution amount.

[VolvoGirl · Accepted solution]

Did you enter a 1099R for a distribution?  Are you seeing an extra 10% Early Withdrawal Penalty on your tax return?  Check your date of birth under My Info.  

Are you married?  Is your spouse under 59 1/2?  Maybe it assigned the 1099R to her.  When you enter the 1099R you have to pick which spouse on the first screen.