cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Returning Member

RMD and estimated taxes

Where do I report using my RMD for estimated taxes?

10 Replies
Highlighted
Level 15

RMD and estimated taxes

It really does not matter how you pay your estimated taxes.

 

You report estimated taxes paid in the Estimates and Other Taxes Paid section of the program (located under Deductions & Credits).

Highlighted
New Member

RMD and estimated taxes

Yes, but I am using my RMD from my IRA In late Nov ‘19 for all of my est taxes for 2019.  Where do I input that on my 1040?  Thank you, Torrey 

Highlighted
Level 15

RMD and estimated taxes

You will get a 1099R for the RMD.  You enter that exactly as shown including any withholding taken out of the RMD.

 

Then if you send in an Estimated payment directly to the IRS yourself you enter that separately.  You don't have to indicate you used the RMD to pay it.

 

You can type estimates paid in the search box at the top of your return and click Find and it will give you a link to Jump To it.

 

OR

To enter Federal or State Estimated Taxes Paid, including a state estimated payment made in January for the prior year, go to

Federal on left or at top.  Personal (Home & Business)

Deductions and Credits at top

Then scroll way down to Estimates and Other Taxes Paid

Estimated Taxes - click the Start or Update button

 

Estimates paid will be on Schedule 5 line 66 which goes to 1040 line 17.

 

 

Highlighted
Level 15

RMD and estimated taxes

You might be asking about form 2210.  If you have a tax due on your return and owe an underpayment penalty you can fill out form 2210 and enter the exact dates you made any estimated payments.

 

It's under

Federal or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button

 

Highlighted
New Member

RMD and estimated taxes

Thank you, Torrey 

Highlighted
Level 15

RMD and estimated taxes

using your RMD to cover estimated taxes is a smart move.  the taxes taken out are considered withholding taxes and the IRS allows allocating them to each quarter despite the actual date the money was withheld.  this is the default and how TT will handle it.  

Highlighted
Level 15
Level 15

RMD and estimated taxes

@dickthompson6 @Torrey (Are you the same person? If so, please stick to one account for the discussion. It's confusing if it looks like two different people are posting.)

 

You say "estimated taxes" but do you really mean that you had tax withheld from your IRA distribution? Tax withheld from the distribution is not estimated tax, it's withholding, just like tax withheld from a paycheck. Estimated tax is the quarterly tax payments that some people make if they do not have any tax withheld from their income. If you make an estimated tax payment you have to send the payment to the IRS yourself. It doesn't matter where you get the money to make the estimated tax payment.

 

If you had federal tax withheld from your IRA distribution, the IRA custodian sends the money to the IRS. The amount will be shown in box 4 of the Form 1099-R that you get in January. All you have to do is enter it in box 4 in TurboTax when you enter your 1099-R, just as it is shown on the 1099-R form.

Highlighted
Level 2

RMD and estimated taxes

@HACKITOFF , could you please clarify your statement? 

 

Are you talking about a situation when someone  hasn't paid enough tax with their four 1040ES submissions and are therefore subject to a penalty?  As I understand it, one can reduce the penalty in the case that they received higher income late in the year than early in the year by reporting income by calendar quarter.

Highlighted
Level 15
Level 15

RMD and estimated taxes

@DFH 

Yes, if you made estimated tax payments and you had higher income late in the year, you might be able to reduce the penalty by using the annualized income method on Form 2210. But it's a lot of work. What HACKITOFF is saying is that you can avoid having to do that by covering your tax with withholding instead of estimated tax payments. Withholding is always treated as having been paid evenly during the year, even if it's actually all withheld in December. As long as the total withholding for the year is enough, you will avoid a penalty altogether.

 

If you are taking RMDs from an IRA, having tax withheld from your RMD is an easy way to produce enough withholding. It's a lot simpler and easier than using the annualized income method.

 

If you rely on estimated tax payments, and your payments weren't enough, you are going to pay a penalty. If you had higher income late in the year, you might be able to reduce the penalty by using the annualized income method, but you aren't going to be able to eliminate the penalty. To completely avoid a penalty, you would have to make higher estimated tax payments later in the year to cover the tax on the higher income, and use the annualized income method.

Highlighted
Level 2

RMD and estimated taxes

Thanks for explanation.