Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.
04-27-2018 02:53 PM
Please help. I am a college student and I am new to Roth IRA. I did not know that I need to have income in order to contribute. I had $4000 saved up from birthday gift to odd jobs and contributed in Roth IRA vanguard. Later I realized that I need to have taxable income which I did not. So, I did an early withdrawal from Roth IRA (I did not do the excessive contribution removal, I just didn't know at that time). When I request early withdrawal they asked me if I wanted to either 1) not withhold federal income tax, 2) 10% of federal income tax I wanted to be withheld. And I was stupid enough to choose federal income tax withheld 10% and state tax as well. It took me awhile to realize that money I contributed to the Roth is already taxed but I was not aware. Now, vanguard only gave me back $3600 and took $400. how can I get $400 back? I did not have any taxable income last year 2017 and the contribution $4000 was from years of saving..please help. Gain from the contribution was only $40 dollars
05-01-2018 05:09 PM
Hello, sangwooc1, and welcome to the community.
If I were in your position, I definitely wouldn't be beating myself up over having taxes withheld from the IRA distribution. No, it wasn't really necessary, but the money that Vanguard took out isn't gone. The $400 that they withheld was sent to the IRS as a tax payment, so it will show up as "taxes paid" when you file your tax return in 2019.
That doesn't help you get it back right now - but provided you don't have any tax liability for 2018 (and I don't think you will, if I'm reading your story correctly), it should be coming back as a tax refund next year.
Hope that helps!