Early IRA Withdrawal to Pay Medical Expenses

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.

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. 

To claim the exception in TurboTax Online, go to:

1. Income & Expenses
2. IRA, 401(k), Pension Plan Withdrawals (1099-R), Edit/Add
3. Form 1099-R
4. Let Us Know a Little More About This Distribution
5. Is this IRA subject to an early withdrawal penalty?  Answer yes, and continue to answer the interview questions, until you come to
6. Let's See If We Can Lower Your Tax Bill
7. 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.

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

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