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Cashed out a 401k from previous employer. Used some of it to pay for child's dental expenses. Can I deduct anything for that?

 
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Cashed out a 401k from previous employer. Used some of it to pay for child's dental expenses. Can I deduct anything for that?

That depends. There is an exemption to the additional 10% penalty for an early distribution from a 401(k) plan if your medical and dental expenses exceed 7.5% of your adjusted gross income (AGI). After you enter the information from the Form 1099-R that reports the distribution, TurboTax will ask a series of questions.

  • Respond as appropriate and continue through the interview. You'll reach a screen that says Let's see if we can lower your tax bill. (Click the first screenshot below to enlarge it for reference.) Click Continue.
  • Next, you'll need to Identify the plan. Since you have a 401(k), check Qualified retirement plan, then click Continue. (Click the second screenshot below.)
  • On the These situations may lower your tax bill screen, enter the amount of the distribution you used to pay for your child's dental work as medical expenses. (Click the third screenshot below for reference.) When finished, click Continue.
  • Follow the onscreen instructions to the conclusion of this section. TurboTax will determine if you qualify for a reduced penalty due to your medical/dental expenses.


The FAQ below tells how to enter your 1099-R in TurboTax. https://ttlc.intuit.com/replies/4194737

View solution in original post

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Highlighted
Level 10

Cashed out a 401k from previous employer. Used some of it to pay for child's dental expenses. Can I deduct anything for that?

That depends. There is an exemption to the additional 10% penalty for an early distribution from a 401(k) plan if your medical and dental expenses exceed 7.5% of your adjusted gross income (AGI). After you enter the information from the Form 1099-R that reports the distribution, TurboTax will ask a series of questions.

  • Respond as appropriate and continue through the interview. You'll reach a screen that says Let's see if we can lower your tax bill. (Click the first screenshot below to enlarge it for reference.) Click Continue.
  • Next, you'll need to Identify the plan. Since you have a 401(k), check Qualified retirement plan, then click Continue. (Click the second screenshot below.)
  • On the These situations may lower your tax bill screen, enter the amount of the distribution you used to pay for your child's dental work as medical expenses. (Click the third screenshot below for reference.) When finished, click Continue.
  • Follow the onscreen instructions to the conclusion of this section. TurboTax will determine if you qualify for a reduced penalty due to your medical/dental expenses.


The FAQ below tells how to enter your 1099-R in TurboTax. https://ttlc.intuit.com/replies/4194737

View solution in original post