It sounds like TurboTax might be charging a penalty due to an incorrect classification. Here’s what you can do:
Check Box 7 Code: Ensure that the 1099-R form has the correct code in Box 7. For an inherited IRA, it should be code 4 (Death). If it's incorrect, TurboTax might treat the account as your own, leading to a 10% penalty.
Correct the Error: If you can't find the error, it might be quicker to delete and re-enter the 1099-R form:
- Go to the Income section in TurboTax.
- Click on the pencil icon next to the 1099-R entry.
- Click on the trash can icon to delete the form.
- Re-enter the 1099-R details with the correct information.
