It is not going to ask you what you did with the money. You are going to get a 1099R for the money you took out of your retirement account. The 1099R will show how much you took out and how much tax was withheld. You will enter that 1099R into your tax return. They usually send out 1099R's in late January to mid-February. Sometimes you have to go to their website to get them.
To enter your retirement income, Go to Federal> Wages and Income>Retirement Plans and Social Security>IRA 401 k) Pension Plan Withdrawals to enter your 1099R.