If you are being prompted to make an RMD entry, it may mean that you are required to take a distribution due to your age.
Required Minimum Distributions (RMDs) are mandatory withdrawals from retirement accounts starting at the age of 73.
If you are now at the age, but did not take the distribution, here are a few things to know:
- You must immediately take the distribution to minimize penalties, which are 25% of the shortfall, or 10% if corrected within two years
- The first RMD must be taken by April 1 of the year following the year you reach age 73
- Subsequent RMDs are required by Dec 31 annually
When in TurboTax and you see, "Let's get more information about your RMD", follow these steps:
- If you do not know what your RMD is, contact your financial advisor to assist you
- Don't enter an amount if this is your first year and you will be taking the distribution by April 1, enter "0" instead
If this is not your first year and the software informs you of a penalty, you may request a waiver by completing Form 5329.
TurboTax will automatically generate a Form 5329 when it determines you owe penalties.
Click the following links for more information, What are required minimum distributions (RMD)? and What is Form 5329?
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