I recently converted an IRA to a Roth (May 2018) and mistakenly\stupidly allowed the financial institution to take out 10% federal and 10% state upfront with a distribution. I am also younger than 59 and will also get hit with a 10% early withdrawal penalty. Is there any option to undue this mistake? I would prefer to pay my taxes during the 2019 tax season with out of pocket money and avoid paying the early withdrawal penalty and also allow my money to grow!
For starters, since you converted it from a traditional to a ROTH IRA, you're paying taxes on the entire amount. Period. I would suggest leave it as a ROTH since once you do reach retirement age, all withdrawals are completely tax exempt, including any earnings that have accumulated since the conversion.
Now for that 10% penalty, your only option is to return the entire withdrawal to the ROTH, and you will have to make up the difference for now, for the 10% withheld for fed and state, out of your pocket. You also have to return the withdrawn amount, including withheld taxes within 60 days of the withdrawal. If you do this (assuming 60 days hasn't passed) then the 10% withheld for state and fed will be refunded to you when you file the 2018 return next year.
Now if the 60 days since withdrawal has already passed, consider it a lesson learned. We all do these kind of things at one time or another. I refer to it as "stupid tax". I've paid that tax too in my years.... and more than once. But so long as you don't pay the same stupid tax for the same stupid mistake, you're good.