2007 taxes I was 1099-r on $20000 on a term. 401k plan from my Employer around November 07? I put it in a savings account. PAID ALL FEES 10% & STATE/FED TAXES & EARLY RETIREMENT PENALTY ON MY 07 TAX RETURNS. In June of 2008 I purchased a Home with that Money all transactions are from the saving acc. Put 16k down? I UNDERSTAND ONLY 10K CAN BE CLAIMED OR WAIVED FROM TAX PENALTIES BUT HOW CAN I FILE THIS YEAR REGARDING THIS ISSUE? Thx

You are referring to the program where you can withdraw up to $10,000 to help finance the first-time purchase of a home. Under this program, you must pay income taxes (state and federal) on the $10,000, but you get to waive the 10% Early Withdrawal Penalty.

Unfortunately, that program applies to withdrawals from IRAs, NOT 401K pension plans.

Sorry!