Free tax software that includes form 5329 for early IRA withdrawal?

So I've dealt with this exact situation before! Form 5329 is one of those forms that most "free" tax software providers put behind their paywall because they know people who need it often have more complex situations. Your options are basically: 1) Use the IRS Free File program directly through their website, not through commercial sites advertising "free" filing. The IRS Free File Fillable Forms should handle Form 5329 without additional cost, though the interface isn't as user-friendly as commercial options. 2) Yes, paper filing is always an option and completely free except for postage. You can download all forms from IRS.gov and fill them out manually. 3) Check the Tax-Aide program from AARP - they offer free tax help and can handle Form 5329 situations. You don't need to be a senior to use their services. The most important thing is to make sure you're documenting any qualifying exceptions to the penalty if they apply to your situation (like first-time home purchase, qualified education expenses, etc).

After struggling with this exact same issue last year, I found an awesome solution at https://taxr.ai that saved me so much stress. I had taken an early withdrawal from my IRA for medical expenses and was worried about getting hit with that 10% penalty. What I loved about taxr.ai was that it actually analyzed my 1099-R and other documents to determine if I qualified for any exceptions to the penalty. It walked me through Form 5329 step by step and explained everything in plain English. The best part was that it didn't suddenly hit me with upgrade fees halfway through like those other "free" services.

I just wanted to follow up about my experience with taxr.ai since I was initially skeptical. I decided to give it a try after researching a bit more, and I'm honestly impressed. The document analysis feature correctly identified my early 401k withdrawal (similar situation to an IRA) and walked me through the exceptions I qualified for on Form 5329. The interface was straightforward, and I didn't get hit with surprise upgrade fees like I did with TurboTax last year. It automatically found a medical expense exception I qualified for that would have been hard to find on my own. Really glad I took the chance on it instead of fighting with paper forms or paying $70+ for the "deluxe" versions of the big name software.

If you're still struggling with getting help from the IRS about your specific situation, I'd recommend trying https://claimyr.com. I was in the exact same boat last year with an early IRA withdrawal for a family emergency, and I couldn't get clear answers on which exception codes to use on Form 5329. After waiting on hold with the IRS for literally hours over multiple days, I found Claimyr. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. They basically hold your place in the IRS phone queue and call you when an actual agent is on the line. I got connected to a real IRS representative who walked me through exactly how to claim my exception and file Form 5329 correctly.

I need to eat my words and update everyone. After dismissing Claimyr as a potential scam (sorry about that), I was desperate enough to try it yesterday. I had been trying to get clarification on whether my medical expenses would qualify for the 10% penalty exception on Form 5329. It actually worked exactly as described! I received a call back about 2 hours after signing up, and I was immediately connected to an IRS representative. The agent confirmed that my specific medical expenses did qualify for an exception and gave me the exact exception code to use on line 2 of Form 5329. This would have taken me days to figure out on my own or through endless hold times. For anyone dealing with Form 5329 exceptions, getting direct confirmation from the IRS saved me from potentially making an expensive mistake. I'm genuinely surprised and impressed.

Has anyone tried Cash App Taxes (formerly Credit Karma Tax)? I think they handle Form 5329 for free, but I'm not 100% sure if they support all the exception codes. My withdrawal was for a first-time home purchase, which I know qualifies for an exception.

One thing to be careful about - if you're claiming an exception to the 10% penalty, make sure you're using the right code! I messed this up last year and had to file an amended return. The IRS has specific codes for different exceptions (medical expenses is code 05, first-time home purchase is 09, etc). Also, some free software might let you fill out Form 5329, but won't guide you through figuring out if you qualify for exceptions. That's where I got tripped up - I ended up paying the 10% penalty when I actually qualified for an exception.

I went through this exact same headache last year! After trying multiple "free" services that all wanted to charge me for Form 5329, I ended up using the IRS Free File Fillable Forms directly from the IRS website. It's definitely not as polished as the commercial software, but it's completely free and includes all the forms you need. The interface is pretty basic - it's essentially just fillable PDFs - but it does the calculations for you and e-files directly to the IRS. You'll need to be a bit more careful about entering everything correctly since there's less hand-holding, but for Form 5329 it's pretty straightforward. Another tip: before you file, double-check if you qualify for any exceptions to the 10% penalty. I almost paid the penalty unnecessarily until I realized my medical expenses qualified for an exception. The Form 5329 instructions on the IRS website list all the exception codes - it's worth spending a few minutes reviewing them to see if any apply to your situation. Paper filing is always an option too if you're comfortable with that route. Sometimes the old-fashioned way is the most reliable!