Solved: 401K Withdrawal and Medical Expenses
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Rasputin1492
New Member

401K Withdrawal and Medical Expenses

My wife and I both took a early 401K withdrawal to pay for my medical expenses. How do I enter that total in the Turbo Tax program when I am being prompted to enter medical expenses in the 1099-R questionnaire? Should I split the total paid between the two of us, only enter the total expenses under my medical expense question and leave hers blank, or enter the total paid twice (once under my section, and once under hers)? We are trying to avoid having to pay the early penalty since we both withdrew to pay for my medical expenses.

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Accepted Solutions
AnnetteB6
Employee Tax Expert

401K Withdrawal and Medical Expenses

The question about the early distribution penalty being waived is actually asking for the amount of the distribution that was used to pay the medical expenses, not the amount of the medical expense.

 

So, for example, if your entire early distribution was $5000 and all of that amount was used to pay medical expenses, then you would enter $5000 in the medical expense box on the page asking about exceptions to the penalty.  If your spouse's distribution was $3000 and all of that distribution was used to pay medical expense, then enter $3000.  If only a portion of the distribution was used for medical costs, then enter the lower number and the penalty will be assessed on the remaining portion.  

 

The actual amount of the medical expenses that you paid out of pocket will need to be entered in the Medical Expense section for itemized deductions.  

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1 Reply
AnnetteB6
Employee Tax Expert

401K Withdrawal and Medical Expenses

The question about the early distribution penalty being waived is actually asking for the amount of the distribution that was used to pay the medical expenses, not the amount of the medical expense.

 

So, for example, if your entire early distribution was $5000 and all of that amount was used to pay medical expenses, then you would enter $5000 in the medical expense box on the page asking about exceptions to the penalty.  If your spouse's distribution was $3000 and all of that distribution was used to pay medical expense, then enter $3000.  If only a portion of the distribution was used for medical costs, then enter the lower number and the penalty will be assessed on the remaining portion.  

 

The actual amount of the medical expenses that you paid out of pocket will need to be entered in the Medical Expense section for itemized deductions.  

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

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