As described elsewhere in this thread, there is a real issue about just assuming you can round (from a precisely known reported value) the reconciliation of the amount considered the RMD portion of the total on the 1099-R, especially when:
• The 1099-R is probably issued by a financial entity that computed, knows and has already reported the actual portion (to $.01) to the IRS.
• One or more of the 1099-Rs with an RMD may require special treatment (like certain beneficiary IRAs) and its RMD was hand-calculated and not reportable in advance to the IRS, but still must be reconciled to the penny.
• You may be reconciling multiple RMDs with one, two or all your 1099-Rs which can be reported as fulfilled from just one (or more) of the 1099-Rs you've received (ie: You can fulfill an RMD's requirements with excess distributions from another retirement account.).
• Excess distributions from a retirement account (beyond the portion used to fulfill RMDs) can also be a) rolled over to another new or existing IRA - where the "pennies" are going to be required - or b) optionally designated as a special type of non-taxable charitable contribution - also requiring precise accounting.
These are just the basics and all are susceptible, because of the complexities (we've only investigated our own situation, which we believe isn't that unusual), to triggering an audit, even if there's less than a dollar at stake. We're aware that we can "fudge" the reconciliation to make the faulty software work, but we'd rather not, nor we guess, would Intuit who hasn't let me down since my 1991 MacInTax return! This thread seems to indicate that there is a common error in the Windows software too. Let's hope someone figures this all out.
