I received a 1099-R for a $10000 IRA withdrawal as I'm 54 years old. I used $3456 of that to pay for spouse life insurance. Do I still have to pay penalty?

[DoninGA]

Since you were not age 59 1/2 or older when you withdrew the funds from the IRA there will be a 10% early withdrawal penalty assessed on the 2019 tax return.  Purchasing life insurance is not an exemption from the penalty - https://www.irs.gov/taxtopics/tc557

To enter, edit or delete a form 1099-R -

• Click on Federal Taxes (Personal using Home and Business)
• Click on Wages and Income (Personal Income using Home and Business)
• Click on I'll choose what I work on (if shown)
• Scroll down to Retirement Plans and Social Security
• On IRA, 401(k), Pension Plan Withdrawals (1099-R), click the start or update button

Or enter 1099-r in the Search box located in the upper right of the program screen. Click on Jump to 1099-R

[dmertz]

Using the money to by life insurance is not an exception to the early-distribution penalty.