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Financial Planning / Tax Strategies
|Subject: Re: Roth IRA early distribution penalty||Date: 2/4/2013 1:50 PM|
|Author: TMFPMarti||Number: 117621 of 125003|
Just wondering why a friend of mine doesn't need to pay a penalty for early distribution of his Roth IRA. In Turbo Tax he has a 1099-R filled out and before choosing the Box 7 code he did show a much higher tax due. But as soon as he choose code "J" for Box 7, the extra tax due disappeared and it went back to what he owed prior to entering the 1099-R. Does this make sense?
It never makes sense to look at that ridiculous "Watch your refund grow" number, which is meaningless until the return is complete. It will be banned when I'm crowned Emperor.
As to whether this particular distribution should result in any tax or penalty liability, there's not enough information to venture an opinion.
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