topic So withdrew 401k money last year for a house down payment but i'm unsure where to put that info. in the wages section or deductions? in Retirement tax questions

So withdrew 401k money last year for a house down payment but i'm unsure where to put that info. in the wages section or deductions?

shane1526 — Sun, 12 Jan 2020 00:26:12 GMT

Re: So withdrew 401k money last year for a house down payment but i'm unsure where to put that info. in the wages section or deductions?

VolvoGirl — Sun, 12 Jan 2020 00:31:03 GMT

You will get a 1099R for it. You don't enter about using it to buy a house. It will be taxable and a 10% Early Withdrawal Penalty if you are under 59 1/2.

The easiest way to get to the 1099-R entry screen is to simply search for 1099-R (upper- or lower-case, with or without the dash) in your TurboTax program and then click the "Jump to" link in the search results.

Enter a 1099R under

Federal Taxes on the left side

Wages & Income at the top

Then scroll way down to Retirement Plans and Social Security,

Then IRA, 401(k), Pension Plans (1099R) - click Start or Revisit

If you are filing a Joint return be sure to pick which person it is for.

Re: So withdrew 401k money last year for a house down payment but i'm unsure where to put that info. in the wages section or deductions?

xmasbaby0 — Sun, 12 Jan 2020 01:09:43 GMT

Hope you understood when you took money out of your 401k that you are going to pay a 10% early withdrawal penalty if you are younger than 59 1/2, plus ordinary income tax on the distribution. Taking money out of a 401k to buy a house is not the same as taking it out of a traditional IRA, with which you can take out up to $10,000 to buy a house without that early withdrawal penalty. There IS a penalty for a 401k, which makes it a pretty expensive way to make a down payment on a house.

You will get a 1099R in late January/early February and you will need to enter it on your tax return.

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.

Re: So withdrew 401k money last year for a house down payment but i'm unsure where to put that info. in the wages section or deductions?

shane1526 — Tue, 14 Jan 2020 13:46:48 GMT

Yes i already know about the taxing and 10 percent. I had to pay the 10 percent when i withdrew the money which was only like $400. I was just trying fo figure out where i had to put the info since in deductions it asked me about if i used any of my 401k money which confused me due to the federal part where wages it asked about it as well.

Re: So withdrew 401k money last year for a house down payment but i'm unsure where to put that info. in the wages section or deductions?

VolvoGirl — Tue, 14 Jan 2020 15:48:37 GMT

You know, You didn't actually pay the tax or 10% penalty (you pay a 10% early withdrawal penalty if you are under 59 ½). You had taxes withheld like from your paycheck. You still have to enter the whole amount (before taxes were withheld) with your other income to figure out the total tax (and it may put you into a higher tax bracket) and then the withholding is subtracted from the total tax to figure your refund or tax due. The withholding will show up on 1040 line 17. The 10% penalty is on 1040 Schedule 2 line 6 which goes to 1040 line 15.

Re: So withdrew 401k money last year for a house down payment but i'm unsure where to put that info. in the wages section or deductions?

shane1526 — Wed, 15 Jan 2020 01:56:15 GMT

Will it say "tell us about Shane's distributions from retirement plans"? And then show a box saying "2019 traditional IRA" or is that meant for people who retired?

Re: So withdrew 401k money last year for a house down payment but i'm unsure where to put that in...

BillM223 — Wed, 15 Jan 2020 15:20:47 GMT

You will enter the information for the 401(k) distribution in the 1099-R, as indicated above. If you have a chance to claim an exemption from the penalty (you apparently do not since you used a 401(k) plan), this will be right after you enter the 1099-R.

I do not know what "And then show a box saying "2019 traditional IRA" or is that meant for people who retired?" refers to, but please note that anyone can take distributions from a traditional IRA whether or not they are retired - the catch is that in most cases, if they are under 59 1/2, then they may also owe an early distribution penalty.

If you are using a 401(k) plan, you should not say anything about an IRA.