Submitted By: someone
Answered: July 22, 2018 10:57 pm

I took a withdrawal from my IRA to pay medical expenses (I’m 50 years old). Am I penalized for this?

Even though you are under age 59½, you won’t be penalized for an IRA distribution used to pay medical expenses in excess of 7.5% of adjusted gross income in 2017 or 2018. The AGI threshold is set to rise to 10% in 2019. This penalty exception applies even if you claim the standard deduction. But the distribution must be taken in the same year that you incurred the medical expenses. And remember, the distribution is still includible in gross income.

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Tax Glossary

Accrual method of accounting

A business method of accounting requiring income to be reported when earned and expenses to be deducted when incurred. However, deductions generally may not be claimed until economic performance has occurred.

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