You find the AGI on your 2025 federal tax return Form 1040 Line 11a
Multiply the AGI by 7.5%
For example - if the AGI is $50,000 then 50000 times 7.5% equals 3750
So only your total medical expenses that are greater then $3,750 would be deductible. Then only the amount of your deductible medical expenses can be used against the withdrawal from the 401(k).
If your withdrawal is less than the deductible medical expenses then there is no exception to the 10% early withdrawal penalty. If your withdrawal is equal to or greater than the deductible medical expenses, then the amount of the withdrawal that matches the deductible medical expenses is exempt from the 10% early withdrawal penalty.
You can view your Form 1040 plus Schedules 1, 2 and 3 at any time using the online editions. Click on Tax Tools on the left side of the online program screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.
To complete a Form 5329 for exceptions to the early withdrawal penalty -
Click on Federal
Click on Other Tax Situations
Under Additional Tax Payments
On Extra tax on early retirement withdrawals - click on the start button
