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You have to enter the Form 1099-R you received. If under the age of 59 1/2 there will be a 10% early distribution penalty assessed on your federal tax return as a tax liability. The distribution is entered on your tax return as ordinary income and taxed at your current tax rate.
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
That is an exception to the 10% early withdrawal penalty if and only if the medical expenses to care for that parent are entered as deductions on your tax return. You are allowed to withdraw from your retirement account any medical expenses that exceed 7.5% of your AGI.
To enter this into TurboTax go and enter the medical expenses into the deductions and credits section of your return. Enter all of them. Then, in the wages and income section, enter your 1099-R that you received from your retirement account. TurboTax will then try to find exceptions to reduce the 10% penalty and you will tell it that the medical expenses are what the withdrawal was used for.
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