No one has the power to make something that is taxable be nontaxable. What is the code on your 1099-R? When did he become disabled?
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2014 but got approved in 2019. the 1099 R is from my work 401K and we bought a house and used that for the main reason to withdraw the $22,000 from the 401k. i turned 55 in Sept of that year and it came as "taxable" . Also because he hadnt been working for 5 yrs, BECAUSE OF DISABILITY, we needed to borrow that money. It shouldn't be taxable but they say we need to have a CPA change the 1099-R to have that box checked and send to the IRS. Wondering if Turbo Tax has a CPA that can do this?
No. The only one that can change your 1099-R is the financial institution that issued it to you. Unless you qualify for an exception, you’ll pay a 10% additional tax penalty on the taxable amount of early distributions from your retirement account before reaching age 59 1/2.
There are exceptions to the 10% tax penalty for early distributions:
- Death or total and permanent disability (you must be totally and permanently disabled)
- Series of substantially equal periodic payments based on life expectancy
- Qualified first-time homebuyer distributions up to $10,000
- Qualified higher-education expenses
- Certain medical insurance premiums paid while unemployed
- Unreimbursed medical expenses that are more than a certain amount of your adjusted gross income
- IRS levy
- Certain distributions to qualified military reservists called to active duty
- COVID-19 coronavirus-related distributions of up to $100,000 from January 1 to December 30, 2020
Once you enter the distribution information from your 1099-R form, TurboTax will help you check for any exceptions that could reduce the tax.