Can a married couple use a 20k early IRA distribution to buy their first home and avoid the early withdrawal penalty?

[marisa-cruz]

Can't seem to get turbotax to allow all 20k even though we both withdrew 10k from our own separate accounts....  Do we have to file separately?

[SweetieJean]

Only if you both have IRA's, and each take $10,000 from your own.

[marisa-cruz]

Thanks!  Can't seem to get turbotax to allow all 20k even though we both withdrew 10k from our own separate accounts....  Do we have to file separately?

[marisa-cruz]

Turns out turbotax goes through the penalty exclusion questions twice, but never indicates which question is for me or my wife.  So it's counting it correctly... just confusing because it doesn't differentiate the questions for each of us.

[dmertz]

You can file jointly or separately.  One $10,000 exception will appear you your Form 5329 and the other $10,000 exception on your spouse's Form 5329, both of which will be included with your tax return if you file jointly.

Enter each Form 1099-R separately and be sure to indicate the correct person to which each form applies.  If you mistakenly report Both Forms 1099-R as belonging to the same person, TurboTax will limit that person's exception to $10,000.  Edit the 1099-R forms in TurboTax to review the indicated owner.