Where do I enter hardship for 401k early withdrawal-Proseries Basic

[TaxGuyBill]

Are you asking how to enter a 1099-R?

A "hardship" does not affect the tax return.

[Taxbreak1809]

My client made an early withdrawal from her 401k to purchase a home.  When an early withdrawal is used for the purchase of a home or medical bills the tax payer can avoid the early withdrawal penalty on there tax return.  where do I find such form if one exists?

[abctax55]

You enter the info/amounts from the F 1099-R that reports the distribution.  In the same area, you report the 'hardship' exclusion.

Early withdrawal penalties relate to Certificates of Deposit, usually..... do you mean the early distribution penalty?

Can't help with specifics as you didn't tell us what software you are actually using.

[Frustrated-in-IL]

Can you cite where an early distribution from a 401k is penalty free if used to buy home?

[abctax55]

Oops... trying to teach OP to fish & skipped over 401-K part. IRAs only

[TaxGuyBill]

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distri...

[qbteachmt]

The taxpayer should have been told there is the optional provision for the plan to allow hardship withdrawals, and there is the IRS regulation for how to treat that withdrawal. They are not related.

[Terry53029]

@Taxbreak1809 I believe that exception is for an IRA, and not 401

[Taxbreak1809]

Thanks 

[taxes96786]

To avoid a letter from IRS...knowing you don't have to report this: here is what I do:

Report the 1099 and adjustment with a statement in the line box that says:

Pursuant to IRS code XXXXXX this is not taxable income. The funds were used for ........

Be sure client retains the "proof of" documents with copy of tax return.

[abctax55]

@taxes96786 

 "..knowing you don't have to report this"

Since WHEN is a 401 withdrawal not reportable? 

"..this is not taxable income. The funds were used for ........"

And WHEN is it not taxable ?

[IRonMaN]

Someone might want to consult pub 17.

[abctax55]

Or, read the instructions for F 5329?

[Frustrated-in-IL]

Ouch.  I am cringing.

I strongly urge anyone who thinks this isn't taxable to following the very sound recommendations of IRonMan and abctax55 mentioned above.  No gray area here.

[qbteachmt]

Sad taxpayer, big tax bill. No advance counseling?

Well, "Tax Talk" is the place these issues are used to learn from.