1099-R

[christina85]

If client paid taxes for State and Federal on IRA with pulling out why are they still getting taxed more??

[Just-Lisa-Now-]

Seriously?    

[christina85]

Yup takes about $2,000 from her when i add it in never had this issue

[dkh]

I don't think Lisa's seriously was regarding the tax.....  I think it was regarding the question.

What tax percentage was withheld?  What tax rate is the client being taxed?   Are they subject to the 10% early withdrawal penalty?    

Lots of variables - only you can answer.

[Just-Lisa-Now-]

This isnt a question a professional tax preparer should be asking.

LOOK at the return, follow the money. Do you see the tax liability increase when you add the income? If the withholding doesnt cover the tax increase, you will pay any additional tax on the return.

It didnt "take anything away", you shouldn't even look at the refund until ALL data has been entered.

[IRonMaN]

Oh boy. 😶

[jeffmcpa2010]

Ever have

a client "paid taxes for state and federal on their WAGES with pulling out why are they still getting taxed more??

[qbteachmt]

Let me try to help:

"If client paid taxes for State and Federal on IRA with pulling out"

None of your clients paid taxes either from payroll withholding or from this withholding. That's because Withholding is a Prepayment process. The IRS realizes this event might be part of the taxpayer's taxable events for the year, and the IRS wants there to be something Prepaid.

It's not until their tax forms are prepared that you, their Professional tax preparer, can tell them if they are Underpaid or Overpaid for Prepayments to the tax they owe. Because they might owe a Balance.

Does that help?

[christina85]

Yes thank you!