While preparing my taxes I realized I hadn't taken my RMD in 2019 because my financial advisor didn't notify me. When I inquired about it they sent me a check in July, 2020. Do I need to file an adjustment to my 2019 taxes, or wait until preparing my 2020 taxes? Thanks.
You'll need to sign in or create an account to connect with an expert.
You will report the 2020 distribution on your 2020 tax return, not 2019.
HOWEVER, to avoid the 50% penalty for missing the RMD, you must file a 2019 5329 form requesting a waiver of the penalty.
You will need to file a 5329 form and request a waiver of the penalty. (The waiver would only be denied if there is no reasonable explanation and the missed RMD was not taken at all.)
Unfortunately this can only be done using the "forms" mode that is only available with the desktop software if you do not have a 1099-R to file.
If you do have a 2019 1099-R to report then the RMD question in the interview will go to the form 5329 waiver interview if you say that the 2019 RMD was not taken.
If you are using the CD/download version:
Enter the forms mode and click on open form. Type in 5329. Choose 5329-T for the taxpayer (first person listed on your tax return), or 5329-S (for spouse - 2nd person on tax return).
Scroll down to Part IX line 52 and enter the RMD amount that should have been taken. On line 53 enter the amount of the RMD that was actually taken (probably zero if it was missed).
Then in the box right under line 53 "Waver of Tax Smart Worksheet" enter the same amount as line 52 (the RMD amount). Then click the "Explanation" button and enter the reason for missing the RMD and your statement requesting a waver.
You will not pay any penalty now until the IRS determines if it will grant the waver, then they will inform you if you owe the penalty.
OR - if using the Online version and have no 2019 1099-R to file, you will have to prepare the 5329 manually .
Download the 5329 form from the IRS website and fill it out the same as above. Print and mail your return with the 5329 form and explanation attached as described in the 5329 instructions.
The 2019 5329 must be attached to your printed and mailed 2019 tax return and cannot be e-filed.
[NOTE: You can only use this method if you are requesting a waver of the penalty and there is no taxable amount on the 5329 form line 55 that must be transferred to the 1040 form]
From 5329 instructions:
Quote:
"Waiver of tax. The IRS can waive part or all of this tax if you can show that any shortfall in the amount of distributions was due to reasonable error and you are taking reasonable steps to remedy the shortfall. If you believe you qualify for this relief, attach a statement of explanation and file Form 5329 as follows.
1. Complete lines 52 and 53 as instructed.
2. Enter “RC” and the amount of the shortfall you want waived in parentheses on the dotted line next to line 54. Subtract this amount from the total shortfall you figured without regard to the waiver, and enter the result on line 54.
3. Complete line 55 as instructed. You must pay any tax due that is reported on line 55.
The IRS will review the information you provide and decide whether to grant your request for a waiver. "
Download blank 2019 5329 form here:
Form: http://www.irs.gov/pub/irs-pdf/f5329.pdf
Instructions: http://www.irs.gov/pub/irs-pdf/i5329.pdf
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
csully
Level 2
BRB99
New Member
rosi312177
New Member
bond314985
New Member
coupe2u
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.