BillM223
Expert Alumni

Get your taxes done using TurboTax

The problem is that you withdrew too much money for the excess. But you are right that had you withdrawn this for the purpose of reimbursing your self for medical expenses, then you would not have to declare as income, so ignore what I said about the Miscellaneous Income. Just document it this way.

 

There is definitely no 20% penalty in any case.

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