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justin.p.ashwort
Returning Member

Where do I explain that I withdrew money from my retirement early for a down payment on our first home? I can't find it when entering my 1099-R.

I have read that, if you use an early withdrawal from your retirement account to purchase your first home, you can receive an exemption on the additional taxes you would have to pay. I put the 1099-R information into TurboTax, and I saw no way to indicate that I used that money for a down payment. When TurboTax asked questions looking for an exemption, it didn't ask whether I used the money for a down payment. I thought it was supposed to do that. I could use help so that I don't pay more taxes than is necessary.
2 Replies
SamS1
Expert Alumni

Where do I explain that I withdrew money from my retirement early for a down payment on our first home? I can't find it when entering my 1099-R.

That exclusion from penalty for first time home buyers is only available if you took the distribution from an IRA retirement account.  If you took the distribution from your 401K plan, there is no first time home buyer exclusion from the 10% penalty

 

In the future, if you need money out of your 401K type retirement account, check with your plan administrator and inquire if you can take a loan from your account balance instead of a distribution.  You will be paying interest but its back to yourself.

 

The pandemic has affected your taxes in many ways. Including reporting in TurboTax the amount of stimulus money you received. Click Here for more information on how the Pandemic affected your 2020  taxes.

justin.p.ashwort
Returning Member

Where do I explain that I withdrew money from my retirement early for a down payment on our first home? I can't find it when entering my 1099-R.

Thanks for this information and advice. Turns out the account was a 401k, not an IRA. Bummer.

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