turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Attend our Ask the Experts event about Deciphering Your Tax Forms on Feb 19! >> RSVP NOW!
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

dejavois
New Member

We took money from 401K and paid for medical bills and funeral expenses for a parent

Can this give us a break from early retirement withdrawdal penalties?
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Reply
IreneS
Intuit Alumni

We took money from 401K and paid for medical bills and funeral expenses for a parent

The distribution will NOT be subject to the additional 10% withdrawal penalty to the extent your unreimbursed medical expenses exceed 10% of your AGI (7.5% if you or spouse was born before January 2, 1951).

You can only take into account unreimbursed medical expenses that you would be able to include in figuring a deduction.  [See information below about deducting your parent's medical expenses.]

After you enter the information on the 1099-R:

  1. You will (eventually) see a screen to Identify the Plan.  Mark that it is a Qualified retirement plan and click Continue.  (See Screenshot #1, below.)
  2. On the screen These Situations May Lower Your Tax Bill, enter the amount that exceeds 10% (or 7.5%) of your AGI in the Medical Expenses box and click Continue.  (Screenshot #2)


You can include medical expenses you paid for your parent on your Schedule A (Form 1040) if:

  • Your parent can be considered a dependent as a Qualifying Relative.   [The parent must have made less than $4,000 in gross income during 2015 and you must have provided more than half of the individual's total support during the year.]
  • Your parent would have been your dependent except that:
  1. He or she received gross income of $4,000 or more in 2015;
  2. He or she filed a joint return for 2015; or
  3. You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2015 return.

Unfortunately, funeral expenses are not a deductible expense.

Please accept my condolences on your loss.




**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question