topic Early IRA Withdrawal to Pay Medical Expenses in Deductions & credits

Early IRA Withdrawal to Pay Medical Expenses

firstlight10 — Sun, 22 Mar 2020 19:48:10 GMT

I had to take an early withdrawal from my IRA to pay medical expenses which were greater than 7.5% of my AGI in 2019 but I can't find the correct place to mark that. All it asks for is the information on my withdrawal and taxes paid (none were) . How do I proceed? I don't want to get charged taxes on the entire withdrawal.

Re: Early IRA Withdrawal to Pay Medical Expenses

AlanT222 — Sun, 22 Mar 2020 20:04:52 GMT

The early withdrawal exception only applies to the 10% early withdrawal penalty. You will still pay income tax on the entire withdrawal.

Once you enter the distribution information from your 1099-R form, we'll help you check for any exceptions that could reduce the tax penalty.

Re: Early IRA Withdrawal to Pay Medical Expenses

firstlight10 — Sun, 22 Mar 2020 20:49:41 GMT

Thank you, I mis-worded my question. I meant to ask how do I avoid paying the early withdrawal penalty? I don't see anywhere to specify what the money was used for.

Re: Early IRA Withdrawal to Pay Medical Expenses

JohnW222 — Sun, 22 Mar 2020 21:08:15 GMT

To claim the exception in TurboTax Online, go to:

Income & Expenses
IRA, 401(k), Pension Plan Withdrawals (1099-R), Edit/Add
Form 1099-R
Let Us Know a Little More About This Distribution
Is this IRA subject to an early withdrawal penalty? Answer yes, and continue to answer the interview questions, until you come to
Let's See If We Can Lower Your Tax Bill
Did you use your IRA to pay for any of these expenses? Here you’ll have the opportunity to enter any medical expenses that the distribution might have been used for.

If you’re unable to get to this last screen, delete and re-input the relevant 1099-R.

Please see Tips and tricks in the TurboTax Help article "How do I view and delete forms in TurboTax Online?" for guidance.

Re: Early IRA Withdrawal to Pay Medical Expenses

firstlight10 — Sun, 29 Mar 2020 18:02:00 GMT

Thank you for your assistance! I had to delete and re-enter my 1099 as I had entered it incorrectly.

Re: Early IRA Withdrawal to Pay Medical Expenses

Mako — Sat, 27 Jun 2020 02:36:01 GMT

Your answer cleared up the confusion as to why the withdrawal amount still shows on 4b of the 1040....BUT, why is this not worded properly on the TT screen...they say "save you taxes" MISLEADING and should be reported!1