Background: My husband's RMD for tax year 2023 got missed/messed up by the investment firm. To give an example, he had a Solo 401k and a traditional IRA. Using some hypothetical numbers, RMD from Solo 401k was supposed to be $1000 and $2000 from Traditional IRA for a total of $3000.
RMD from Solo 401k wasn't distributed and in that regard based on my research I discovered I can file form 5329. Turbo Tax asked the applicable question and eventually landed me in Form 5329 so I can fill the reason for the waiver (Section IX - Section 9). When I review the filled form, Turbo Tax shows these lines for Form 5329...
Line 52: Minimum Required Distribution for 2023 - 3000
Line 53: Amount Actually Distributed to you - 2000
Then the small box that shows Waiver of Smart Tax Worksheet properly shows the amount for which Waiver applies as: 1000
Line 54: Subtract Line 53 from 52. If Zero or less, enter 0 - but here Turbo Tax has entered a 1.
Line 55 Additional Tax shows 0.
Here are my questions:
A. Shouldn't line 54 be 1000? Why is it showing 1?
B. Is the form 5329 for waiver of penalty (for not taking the RMD in the above case) OR is it waiver of the tax on that $1000?
C. I tried to Ctrl-D in box 54 and entered 1000 myself but Turbo Tax flags it as an error.
D. If I want to pay tax on that $1000 (because subsequently in January 2024 the investment firm processed that $1000 as excess contribution removal plus $10 as earnings on that $1000), where/how would I report in Turbo Tax?
