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:
- 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.)
-
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:
- He or she received gross income of $4,000 or more in
2015;
- He or she filed a joint return for 2015; or
- 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.
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