@yarik83 wrote:
I paid 10% at time of withdrawal like everyone else does. It then at time of withdrawal talked about another 10% being waived due to covid.
In filing taxes through turbotax, when I remove 1099-r and re-enter it, it allows me to go through the prompts about covid. Last screen where it asks about paying taxes on distribution amount "now" if you check it, it jumps your refund of $1,800 to $12,000 owed. If you uncheck it, it keeps your refund of $1,800 but does not withhold 1/3 over 3 years.
So... if I submit my taxes... I do not want to be hit by IRS for checking or unchecking the box because programming of website omitted something.
I need to know that when I keep box for "pay all tax now" empty and my refund is $1,800 that I am not going to be billed by IRS for $12,000/3 = $4,000 for 2020.
Clearly checking that box automatically places you into poverty and unchecking that box does not explicitly say that you have "started paying over 3 years effective immediately".
The taxes that were withheld from the withdrawal are entered on your 2020 tax return, the full amount. The covid related early withdrawal penalty is waived. If you did not select the box to pay tax on the entire retirement distribution in 2020, then only 1/3 of the withdrawal is entered on your tax return as taxable income.
Look at your tax return Form 1040
Click on Tax Tools on the left side of the screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.
