Retirement tax questions
Yes. Up to $10,000 is excluded from the penalty, but you do need to indicate that you used the money for a first time home purchase.
Here's how to do this in TurboTax Online:
- Navigate to Federal > Wages & Income > IRA, 401(k), Pension Plan Withdrawals (1099-R) Add/Edit
- Your withdrawal will be shown in a summary on a screen that says "Here's your 1099-R info"
- Choose "Continue"
- Continue through the interview until you arrive at a screen that says "Did you use your IRA to pay for any of these expenses?"
- Here, enter the amount of the withdrawal spent on the first-time home purchase (up to $10,000)
Here is some information you may find helpful: An Early Withdrawal From Your 401(k): Understanding the Consequences.
