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New Member
posted Jun 1, 2019 12:39:08 PM

How do I calculate amount I used on medical expenses, from 401K early distribution/loan offset, to avoid paying the 10% penalty?

0 9 1286
9 Replies
Level 15
Jun 1, 2019 12:39:09 PM

@dmertz Is Loan offset eligible for 10% penalty exception?

Level 15
Jun 1, 2019 12:39:10 PM

Yes.  A penalty exception, if one has one, can be applied to any early distribution.

New Member
Jun 1, 2019 12:39:11 PM

What do I factor into the medical amount?
Out of pocket spent for 2018?
Medical bills at the time of the distribution?
Or medical bills paid after the distribution?

Level 15
Jun 1, 2019 12:39:14 PM

Amounts paid out of pocket in 2018.  The amount of those expenses that exceeds 7.5% of AGI can be claimed as a medical expense exception to the early-distribution penalty.  It's the amount that would have appeared on Schedule A line 4 if you itemized deductions.

New Member
Jun 1, 2019 12:39:16 PM

I'm using standard deduction, not itemized. Does the exception apply to both or just itemized?

Level 15
Jun 1, 2019 12:39:17 PM

The exception applies whether you itemize or not.  It just so happens that the amount on which you can claim this exception is the same as the amount that would appear on Schedule A line 4 if you *did* itemize.

New Member
Jun 1, 2019 12:39:19 PM

Thank you for the information.

Intuit Alumni
Jun 1, 2019 12:39:20 PM

When you enter your 1099-R, you will answer a number of interview questions that will lead you to the screen below in the screen shot.

Level 15
Jun 1, 2019 12:39:22 PM

screenshot?