How do I file form 5329?

What is the reason that you need to file Form 5329? The form covers 9 different situations. You would have to make entries in different places in TurboTax, depending on why you need the form.

 

I need to file form 5329 because I am disabled and withdrew from an IRA

In order to complete Form 5329, you will need to go back to your Form 1099-R input and walk through the interview questions.

 

To do so, follow these steps: 

1. Login to your TurboTax online account and click on Pick up where you left off
2. On the left side of your screen, click on Federal and then Wages & Income
3. Scroll down and choose Edit/Add next to IRA, 401(k), Pension Plan Withdrawals (1099-R)
4. Scroll down and click Continue
5. Walk through the interview questions until you get to the screen Let's see if we can reduce your early withdrawal penalty and click Continue.
6. On the Identify the Plan screen, choose IRA
7. If you are considered permanently disabled (see below), you can put the amount of your IRA distribution in that box and click Continue

This is how the IRS defines totally and permanently disabled, Form 5329 Instructions: 

Distributions due to total and permanent disability: You are considered disabled if you can furnish proof that you can’t do any substantial gainful activity because of your physical or mental condition. A medical determination that your condition can be expected to result in death or to be of long, continued, and indefinite duration must be made.

For more information, please see this TT Help Article: Are there exceptions to the early distribution penalty on an IRA?