Question

I took out money from my 401k and used it for a primary home residence deposit.

Forum|Forum|6 years ago
February 4, 2020
1 reply
0 views

How can I offset part of the penalty?

TurboTax Live Deluxe Online

Employee

Sorry that you misunderstood the rules for taking funds out of a 401k. There is no exception to the 10% early withdrawal penalty for taking money out of a 401k to buy a house if you are under 59 1/2, That is only with a traditional IRA. You are now subject to the penalty plus ordinary income tax on those funds.

Your 1099R must be entered on your tax return:

To enter your retirement income, Go to Federal> Wages and Income>Retirement Plans and Social Security>IRA 401 k) Pension Plan Withdrawals to enter your 1099R.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**