From October 2006 through third week in December 2006 I was out of work with umbilical hernia on disability. My job was in an office sitting at a desk.

I was cleared and returned to work for the final week in December 2006. Starting in January 2007 I began delivering heavy boxes of food for a food delivery business.

The hernia surgeon did suggest in October 2006 that I stay out of jobs requiring heavy lifting. But being thick-headed I thought I would be okay. And went ahead with the new job with heavy lifting in January 2007.

By the end of January I was suffering with various problems related to the heavy lifting... testicular hydroceles, anal fissure, and pain at the site of hernia insicion from the previous October 2006 . I had to stop doing this work in the last week of February 2007 It was my friend and my business and we were not set up for this.

Also in January I took a early distribution from my 401k of $23,000 of which $4600 was deducted in taxes off the top.

I am currently back behind a desk lifting nothing heavier than a pencil.

To be 100% honest, the reason I took the early distribution was because I started to struggle with this new job not a little because of the medical problems I was experiencing.

As I prepare my 2007 taxes I am wondering if the fact that the hernia for which I was on disability in late 2006 partly contributed to my reason for not being able to perform my job in this line of work early in early 2007 would be reason to not have to pay the 10% penalty?

Thank you.

Neative. You were working when you took the distribution, so, by definition, you were NOT disabled.

Now, if, in 2007, you paid medical bills in excess of 7.5% of your adjusted gross income, you probably can avoid the 10% Early Withdrawal Penalty that way.

Yep... I agree with Uncle Sam's nephew... you do not qualify for the 10% break... though your calculations was 20% Did you know that? If not, Uncle Sam did you through the rear twice!:eek:

Noted!