topic 401k withdrawal for medical expenses in Retirement tax questions

401k withdrawal for medical expenses

nweingardt — Wed, 04 Feb 2026 19:28:47 GMT

we took out money from my husbands 401k to pay for medical expenses. I entered the amount and tax before we got the 1099. When i went back in and entered the 1099 it did not ask again if it was for medical expenses. Why or how do i enter it?????

Re: 401k withdrawal for medical expenses

DoninGA — Wed, 04 Feb 2026 19:36:09 GMT

Did you have deductible medical expenses that exceed 7.5% of your adjusted gross income?

Re: 401k withdrawal for medical expenses

nweingardt — Wed, 04 Feb 2026 19:55:16 GMT

i have know idea, where would i find that?

Re: 401k withdrawal for medical expenses

nweingardt — Wed, 04 Feb 2026 19:58:53 GMT

we took out 4000.00 and paid 4000.00 on medical

Re: 401k withdrawal for medical expenses

Opus 17 — Wed, 04 Feb 2026 20:02:20 GMT

If your total income is, for example, $100,000, then the only expenses eligible for the penalty exception are expenses more than $7500 (more than 7.5% of your income). If your expenses are less than 7.5% of your income, then you are not eligible to exclude the penalty for early withdrawal, even if you used the withdrawal for medical expenses.

Re: 401k withdrawal for medical expenses

nweingardt — Wed, 04 Feb 2026 20:06:18 GMT

our gross income with 401 was 95846.00

Re: 401k withdrawal for medical expenses

nweingardt — Wed, 04 Feb 2026 20:08:26 GMT

even if we are 64 years old

Re: 401k withdrawal for medical expenses

DoninGA — Wed, 04 Feb 2026 20:09:51 GMT

You find the AGI on your 2025 federal tax return Form 1040 Line 11a

Multiply the AGI by 7.5%

For example - if the AGI is $50,000 then 50000 times 7.5% equals 3750

So only your total medical expenses that are greater then $3,750 would be deductible. Then only the amount of your deductible medical expenses can be used against the withdrawal from the 401(k).

If your withdrawal is less than the deductible medical expenses then there is no exception to the 10% early withdrawal penalty. If your withdrawal is equal to or greater than the deductible medical expenses, then the amount of the withdrawal that matches the deductible medical expenses is exempt from the 10% early withdrawal penalty.

You can view your Form 1040 plus Schedules 1, 2 and 3 at any time using the online editions. Click on Tax Tools on the left side of the online program screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

To complete a Form 5329 for exceptions to the early withdrawal penalty -

Click on Federal

Click on Other Tax Situations

Under Additional Tax Payments

On Extra tax on early retirement withdrawals - click on the start button

Re: 401k withdrawal for medical expenses

DoninGA — Wed, 04 Feb 2026 20:11:06 GMT

@nweingardt wrote:

even if we are 64 years old

If you are older than 59 1/2 there is no 10% early withdrawal penalty

Re: 401k withdrawal for medical expenses

Opus 17 — Wed, 04 Feb 2026 20:24:58 GMT

If you are over age 64, there is never a 10% penalty for early withdrawal, so you won't be asked about penalty exceptions. All withdrawals from a pre-tax 401k are always subject to regular income tax and there are no special exemptions.