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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 7624
Experience:  20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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I am in panic mode. I am computing my taxes and I did a

Customer Question

Hello Pearl Wilson! I am in panic mode. I am computing my taxes and I did a withdraw on a IRA/SEP/Simple retirement account I had from my previous employer in 2017, 2 draws. I paid tax estimated with the withdraw and was told it would go towards my fed taxes. I paid $2,222 on withdraw of $22,111 ...But my taxes say I owe $3,000 more now.
JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: My employment ended with previous employer in 2016. I had some financial hardship and needed some money to get things paid off
Submitted: 8 months ago.
Category: Tax
Expert:  Barbara replied 8 months ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

If you are under age 59 1/2, there is a 10% penalty in addition to the income tax you pay on the withdrawal.

Based on the information you provided, you had 10% withheld for federal taxes. 20% is generally the amount to withhold at time of distribution.

Unfortunately, when the distribution amount gets added to your other income, your tax liability can increase.

Please let me know if I can assist you further.

Thank you and best regards,

Barb