Tax question on 1099-R

[Pulse Red GTO]

Ok I am doing my taxes & I got this 1099-R from Axa Equitable in the mail for a retirement acct I cashed in. The taxible amount on it was $2975.71 & the took out $297.57 in Fed taxes & when I put it in the tax program, it took like an additional $700 off my return!!! Does that sound right? I only had $3000 taxible & am paying $1000 for it? I filed married w/ my wife & we made $52K gross together. I figured my bracket would be cheaper than that!!! Any help would be great!!!

[gwballin]

If the age on your profile is correct the first 297.57 was the 10% penalty for an early distribution.

Whether or not the additional $700 is correct, I could not tell you without knowing your whole situation, but based on the very limited info I have you should be in the 15% bracket.

[Patriot Performance]

I will get an answer for you in a few minutes when my mother calls back. She owns a tax business. Great accountant.

[Jims455]

you're boned

[Pulse Red GTO]

Awesome!!! Actually the policy was started back in 1992, so there wasn't a early withdrawl, they said that the minimum they will withhold is 10%, but I though I would only be paying about 15%, so an extra 5% on the difference I thought would be right? I was doing my taxes on taxact.com

[gwballin]

Awesome!!! Actually the policy was started back in 1992, so there wasn't a early withdrawl, they said that the minimum they will withhold is 10%, but I though I would only be paying about 15%, so an extra 5% on the difference I thought would be right? I was doing my taxes on taxact.com

Generally, "distributions from a qualified retirement plan are subject to an additional 10 percent penalty tax if they are made before the participant reaches age 59 1/2 (IRC Section 72(t)(1))"

It doesn't matter how long you've had the account, if you are 26 as you profile suggests the 10% penalty will apply unless you meet one of the exceptions. If you don't meet any of the exceptions there will be a Code "1" in box 7 of the 1099-R. That 10% will be in addition to your ordinary income tax rate.

[Pulse Red GTO]

Ah I will have to check that out! But yea I am 26, thanks for the info!

[Patriot Performance]

My mother said that 30% is correct. She also said you have 60 days to put the money back in without penalty. Hope this helps.

[Pulse Red GTO]

Awesome, yea that does & actually I did put it back into something, so now I won't be pentalized & might actually get money back now!!!