When counting medical expenses as reason for a 401k distribution in 2020, do I list the full amount or just what exceeded 7.5% adjusted gross income? What's my agi?

[CFChop]

My medical expenses were approx 15% of my gross income.  I also was furloughed from my job and took a 401k distribution - when asking for reasons for the distribution, I am asked to list the $ amt of medical expenses - with "exceeding 7.5% agi" noted - I am not sure what the agi is for this question and if the answer is the full amount of my medical expenses (because it was over 7.5%) or only listing the amount that is over 7.5%.

[ColeenD3]

Below is the screen relating to the exceptions if it were from an IRA. You would enter your entire amount of medical expenses.

[dmertz]

No, in that box you only enter the portion of medical expenses that exceed 7.5% of AGI or the amount of the distribution on which you are claiming this exception, not the entire amount of medical expenses.  Click the Learn More link where TurboTax explains this (although this help page has not yet been updated to reflect the change from 10% to 7.5% of AGI).

TurboTax puts on Form 5329 line 2 with code 05 whatever amount you enter in the box, so the amount that you enter in the box must not exceed 92.5% of AGI.  (92.5% = 100% - 7.5%)

[CFChop]

Thank you so much!  How do I determine this year’s AGI? Isn’t that the number generated by doing one’s taxes?

[dmertz]

After entering everything else that is to be reported on your tax return, your AGI is on line 11 of Form 1040.  If you haven't yet made all of the other entries needed to complete your tax return, additional entries could change your AGI and the amount that you are permitted to claim as a code 05 exception on line 2 of Form 5329, so make sure that everything else is done first.

[CFChop]

Thank you again!  All done for this year!

[kmcoch]

I also withdrew money from my 401K for medical expenses. Do I also list the medical expenses in the Deductions and Credits section, or is that double-counting?

[VolvoGirl]

Yes you still need to enter medical under Deductions & Credits.   The 401K entry is only to get the exception for the 10% Early Withdrawal Penalty.

[kmcoch]

Thank you!