@Tasteseekers wrote:
I think some of the advice above does not clearly reflect how you should account for anything taken out of a retirement account under the RMD guidelines. The requirement to take a distribution was suspended, but if you took one, you have to account for it. I believe whatever that was withdrawn should be reported as income as a normal RMD, matching the amount shown on on the 1099-R and then, if you executed a rollover, returning all or part of it back to your IRA within the 60 day allowable limit for rollovers, you would report the rollover amount accordingly.
I'm using TurboTax desktop, but I presume the online version works the same way. I took a distribution. I fill out the information as it was received from my institution for the 1099-R entry. IF I had returned all of it during the allowable rollover period, I would answer 'No' to the question of whether this was an RMD for 2020. On the 1040 form it would show the amount of the distribution on line 4a and the taxable amount on 4b as $0, indicating a rollover took place.
If I had NOT returned any of the distribution, I would answer 'Yes' to this question and select the choice that all of this distribution was an RMD. The total amount of the distribution shows up on line 4b.
I in fact did a partial rollover, so I answer 'Yes' to this question and select 'Part of this distribution was an RMD'. I then fill in the difference between the amount I originally withdrew and the amount I returned in the prompt for how much applies to the RMD. The 1040 then shows the total distribution on line 4a and the correct taxable amount on 4b.
Hopefully, this helps cover all the bases.
@Tasteseekers if you note the date on the above post it is February 2020, so the discussion is abut 2019 tax returns that had nothing to do with the 2021 rules for filing 2020 tax returns.
For 2020:
Delete the 1099-R you entered and re-enter.
Answer the RMD question that "None of this distribution was a RMD" or "RMD not required" depending on the TurboTax version - because it was NOT a RMD, there were no 2020 RMD's.
If this is an inherited IRA then answer the "Is this IRA inherited" with NO. The purpose of that question is to PREVENT rolling an inherited IRA over, but is allowed for 2020 only.
Then you will get the screen to say it was "moved" and all rolled over. Or if a part was rolled over choose a "combination for things" and enter the part rolled over in the top box.
Also check the box that this was NOT a COVID related distributions - it was a RMD that was returned.
That will put the 1099-R box 1 amount on the 1040 form line 4a with the word ROLLOVER next to it.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
