IRA

Forum|Forum|6 years ago
February 14, 2020
1 reply
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First time working with Turbo Tax.

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

Best answer by VolvoGirl

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.

DavidS127

Level 13

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.

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VolvoGirlAnswer

Level 15

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.