I paid a big hospital bill in 2022. I took the standard deduction in 2022 (and therefore did not take the medical expenses deduction). However, I took an early withdrawal of a retirement fund in 2022 and used some of that to pay the hospital bill. When I filed my 2022 taxes, I claimed medical expenses to reduce the amount of my early retirement withdrawal that incurred the early retirement withdrawal tax penalty. All good so far. Then in 2023 I got a big refund from the hospital (several thousands dollars) because they had apparently overcharged me in 2022. Do I need to amend my 2022 tax return? Or do I claim in my 2023 tax return all of the hospital refund as income? Or do I claim only part of the hospital refund in my 2023 tax return as income (the part by which my 2022 tax burden would have changed if I had included the hospital refund in my 2022 tax return)? For whichever approach is correct, where in Turbotax should I do it? Again, I took the standard deduction in 2022 and did not itemize, so this has nothing to do with that. This has to do with the 2023 hospital refund affecting how much of the early retirement withdrawal I really could claim as not incurring the early retirement withdrawal tax penalty because of medical expenses.
