Hi, I took a chunk of my 401k to pay for my school in 2017 and I received a proposal tax form the IRS this year. Is there a good instruction or a turbo-tax software I can use to fill my 5329 form? I read the instruction and not quite understand it. Thanks!
If you used our program in 2017, you can click on amend, download the software to your computer and let the program do some of the work. See how to file an amended return. It will give you the correct codes and charge the required 10% where necessary. It will not correctly calculate additional penalties and interest, for the last 2 years, the IRS will do that part.
A 401k used for college is not exempt from the 10% penalty.
Using the money to pay for school is not an exception to the early-distribution penalty on a distribution from a 401(k). That exception only applies to distributions from IRAs. A 401(k) is not an IRA. If the IRS is assessing an early-distribution penalty, you owe the penalty and you can just pay it unless you have some other exception that applies that could be reported on From 5329.