topic More accurately, the amount that is exempt from penalty i... in Retirement tax questions

I would like to cash out my 401k for dental expenses. Do I have to pay the penalty?

meagang78 — Fri, 07 Jun 2019 22:27:42 GMT

If the dental expenses would normally be a medical expens...

Bsch4477 — Fri, 07 Jun 2019 22:27:44 GMT

If the dental expenses would normally be a medical expense (as opposed to cosmetic) you can take an amount greater than 7.5% of your AGI without a penalty. You still have to pay income tax on the amount withdrawn.

More accurately, the amount that is exempt from penalty i...

dmertz — Fri, 07 Jun 2019 22:27:48 GMT

More accurately, the amount that is exempt from penalty is an amount distributed up to the amount of non-reimbursed medical expenses that exceed 7.5% of AGI. This is the amount of medical expenses that would appear on Schedule A line 4 if you were to itemize deductions (without any requirement that you actually itemize).

Re: If the dental expenses would normally be a medical expens...

amydavidnatalie — Tue, 10 Dec 2019 17:02:23 GMT

To add to this question, would the money be considered income, even if I did use the exemption for medical expense?

Re: If the dental expenses would normally be a medical expens...

VolvoGirl — Tue, 10 Dec 2019 17:08:33 GMT

Yes it will add to your income and be taxable. The exemption is only for the extra 10% Early Withdrawal Penalty if you are under 59 1/2.

Re: If the dental expenses would normally be a medical expens...

amydavidnatalie — Tue, 10 Dec 2019 18:37:10 GMT

thanks!