If the IRA contributions summary page shows an "excess accumulation" penalty, it means TurboTax thinks your actual distribution was less than your required distribution. However, Since you did not co...
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If the IRA contributions summary page shows an "excess accumulation" penalty, it means TurboTax thinks your actual distribution was less than your required distribution. However, Since you did not contribute more than the limit and did not miss your RMD, we'll need to go back to your Form 1099-R entries to ensure TurboTax knows this so that you avoid any penalties.
First, delete the Form 1099-R and also delete any Form 5329:
On the left panel, click on the down arrow to open more options
You may have to scroll down a little to view the Tools option below
Click on Tools, then Delete a form (Usually the third option down)
Scroll down to delete Form 1099-R and then delete Form 5329-T (and 5329-S, if applicable)
Now, click back on Income to return to input the Form 1099-R information again:
Go to Income on the left panel within your TurboTax account
Scroll down to Retirement Plans and Social Security and click on the down arrow to the right
Click Start to the right of IRA, 401(k), Pension Plan Withdrawals (1099-R)
Click the Yes box when you see, "Did you get a 1099-R...?"
Click the "Enter a different way" box
Click the "Type it in myself" box
Click on the box that pertains to your type of 1099-R (typically the first box), Continue
Next, you will see, "Enter your 1099-R provider's info", complete that, then Continue
Next, you will see "Enter your 1099-R details from _". Enter the information from the original Form 1099-R that you received
Ensure the details from your Form 1099-R are correct checking for which Distribution Code(s) was used in Box 7, then Continue
Continue through until you reach, "Let's get more information about your Required Minimum Distribution (RMD)", enter your RMD due by December 31
Next, you are asked, "How much of this distribution applied to your December 31 RMD?" (Only enter the RMD amount for this account, not your entire RMD amount)
If you select "Some", you will need to enter the exact amount of this distribution that applied to your RMD
You will reach "Review your 1099-R summary", press Continue (not the pencil) and additional questions will generate for you to answer
When you reach "Let's go over any required minimum distributions (RMD)", Continue (not the pencil)
The above steps should resolve the incorrect penalty calculation.
Note: You can also tell TurboTax to use one of your accounts to satisfy all of your RMDs if one of your distributions was enough to cover your total RMD by following the above steps and then entering zero (o) as the RMD for your other Form 1099-R entries and answering "No" to, "Did you miss a RMD?".
If the $500 penalty persists, it might be due to an excess contribution penalty of 6% elsewhere, such as from a W-2 (Box 12), if applicable.