If you return an excess Required Minimum Distribution (RMD) within 60 days, it is generally not taxable.
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60-Day Rollover: If you realize the excess RMD within 60 days of receiving it, you have the option to return the excess amount to your retirement account. This process is called a 60-day rollover.
- Tax Implications:
Fully Redeposited: If you completely redeposit the distribution amount (including any withheld taxes) back into your retirement account within the 60-day window, it is considered a rollover and is not taxable.
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Reporting:
- When you enter the Form 1099-R (which reports the distribution) into tax software like TurboTax, indicate the amount of the distribution that was the RMD.
- Specify that you moved the money to another retirement account or back to the same account.
- If the rollover doesn’t violate the one-rollover-per-12-months limitation, report the amount rolled over.
in short by law they must report the 28K as a distribution in box 1 since you actually got that amount. the box taxable amount not determined should be checked. The 5498 will show $11K in box 2 indicating a rollover. If you got $28M then Vanguard would be required to report $28M but if you only got $8M Vanguard would need to issue a corrected 1099-R. completing the 1099-R entries correctly in Turbotax will result in only $17K being taxed.
for RMD amount in Turbotax enter the $17K. eventually, you'll get to a screen that asks what you did with this money. so check the circle that says you returned it. Next check the circle that asks about doing a combination. Finally you should see a box about the amount rolled over where you will enter the $11K.
on the 1040 box 4a should be $28K the word "rollover" should appear and 4b should be $17K
Will filing a complaint to Vanguard CEO, or to SEC, help to get back my $2,500 overpaid tax? proper entry in Turbotax will not result in paying the extra $2500 so there's nothing to get back. As to filing a complaint that's up to you.
