My mom is retiring from her company after 27 years. She has 2 pensions and is going to withdrawl the small?

one to have some money to fall back on. She was told she will have to pay 20% taxes plus another 10% penalty for early withdrawl. My question is, will she be 1099'd on this money if she already paid the taxes on it?

Public Comments

1. Yes. The 20% you refer to is apparently withholding. Her actual final tax won't be determined until she files next year's tax return.
2. Yes, she will receive a 1099-R. The taxes that are withheld are just withholding, and might be more or less than what she actually owes. She'll show the amount withdrawn as income on her tax return, and the amount withheld as tax already paid in, and will then calculate her tax, and what she owes or should have refunded. The 10% penalty is assessed if she is under age 59-1/2.
3. If your mom withdraws before 59 1/2, she will pay 10% early withdrawal and the money will be taxed at normal income. So she should withdraw in the year, she will have less income.