Problem: TurboTax Deluxe desktop generates a Form 5329-T for payments from a NONQUALIFIED annuity that I purchased and annuitized in 2023. (There was no Form 5329 in 2023 TurboTax Deluxe desktop.) Now in 2024 TurboTax Deluxe desktop, Form 5329-T (Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts) is created and shows pre-populated exception 12 ("distribution incorrectly indicated as early distribution...Include on line 2 the amount you received when you were are 59 1/2 or older.") The amount on line 2 is the GROSS distribution in 2024, not the TAXABLE AMOUNT shown on line 2 in Form 1099-R from the insurance company that sold me the annuity. The 1099-R form shows 7D in line 7 distribution code ("annuity payments from nonqualified annuities"). (The TurboTax forms library for my 2024 1040-SR shows Form 5329-T with the GROSS distribution amount and only exception 12).
1. Why is Form 5329-T even generated by TurboTax (possibly a software problem) since the 2024 distributions (a) were regular monthly payments (exception 2 should apply-"distributions made as part of a series of substantially equal periodic payments", (b) were NOT early distributions, and (c) the nonqualified annuity is not a "tax-favored retirement plan?
2. Can Form 5329-T be deleted and not filed with Form 1040-SR with IRS either electronically or by mail?
3. IRS instructions for Form 5329 indicate code 99 ("enter this exception if more than one exception applies") but TurboTax does not allow me to change the pre-populated cod 12 if more than one exception applies, i.e., Exception 02-"substantially equal periodic payments" and Exception 12-"distributions incorrectly indicated as early distributions).
