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carbolito
Level 1

Can I classify IRA distributions used for first time home purchase in TurboTax?

My wife and I both withdrew $10k each from our 401k/IRA accounts towards the purchase of our first/primary home. I was told that these IRA distributions are allowed/penalty-free as long as the amount is below $10k per person and when filing our taxes we specify that this distribution was for a first time home purchase. Now, will I be able to do this in TurboTax next year, or will I have to use a tax preparer?

2 Replies
TaxGuyBill
Level 9

Can I classify IRA distributions used for first time home purchase in TurboTax?

Yes, TurboTax can do that to waive the 10% penalty.

However, you said "401k/IRA".  The penalty exception for a first-time homebuyer only applies to IRA withdrawals, not 401(k) withdrawals.  So if either of you withdrew from a 401(k), that penalty can not be waived.

https://www.irs.gov/publications/p590b#en_US_2018_publink1000230922

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distri...
SweetieJean
Level 15

Can I classify IRA distributions used for first time home purchase in TurboTax?

However, you will still owe taxes on the withdrawals.
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