I never thought I would have to touch it early but had some major unexpected medical expenses in the family in 2018. Contributions are supposedly able to be withdrawn penalty-free at any time, but looking at Google results doesn’t give much confidence in how to do it. CSRs at brokerage not knowledgeable enough to help. I can prove a much larger basis than what I took out from past records but 1099-R box 5 is blank. Will the 8606 attached to my return fix things? And doesn’t the IRS have all the 5498 forms on record anyway? Tax software doesn’t seem to give the option for this type of thing. Any thoughts or suggestions are appreciated.
Answers
https://financialducksinarow.com/1192/two-5-year-rules-for-roth-iras/
Refer to the last paragraph in this article as quoted below (underlines added):
"Of course, the regular contributions can always be taken out of the account tax free (no 5-year rule applies). "
Better yet, it appears you may ask the author directly by using comments at the end of the article.
"The early withdrawal penalty does not apply to distributions that: ... Are used to pay for unreimbursed medical expenses that exceed 7 1/2% of adjusted gross income (AGI)."
The *penalty* if you don't qualify to waive it is 10%.
But all of the possible penalty-waiving criteria matter only if you are needing to withdraw more than the total amount of your *contributions* to the Roth over the years. You only have to worry about penalties if you are also taking out some or all of your Roth's earnings/gains.
It appears that you don't need to provide proof of it when you file, but you should save copies of the relevant medical bills in case you ever get audited for it.
