I have 4 traditional IRA accounts in my IRA, the first and second accounts withdrew nearly double their stated RMD amounts, the third account withdrew its total RMD and the fourth account withdrew only about half of its RMD. No problems were seen when I entered the numbers for the first three accounts in their worksheets, which collectively covered my entire RMD requirements for all four accounts by almost double. However, when I entered the total RMD amount and the withdrawal amount in the fourth account I was shown nowhere to declare that the underpayment of RMD for that account was already covered by the other accounts to satisfy my total aggregate RMD for my IRA. What I did see was creation of a Schedule 2 and a Form 5329-T for "Additional Tax on Retirement Distributions".
Can I expect to see this problem resolved in January when the IRA and Pension Distributions module is released for filing?
The 1099-R section of TurboTax for 2024 is not available yet. It is currently expected to be available January 11. (That date could change.) You must have entered your IRA withdrawals in forms mode, which does not tell you that it's not ready yet.
When the 1099-R section is available, enter your 1099-R forms in the Step-by-Step interview. After you have entered all of your 1099-Rs, continue through the questions. You will come to a screen that asks you if you took your full RMD. All you have to do is answer that you did receive your full RMD.
Thank you for your prompt reply.
Yes, I did use the forms to enter my data since I was trying to get an early look at my tax situation instead of waiting all the way to mid-January. Since the subject worksheet had been modified to reflect new fields/qustions relative to previous years, I just wanted to ensure I would still have the opportunity to confirm that all of my RMD had been accounted for.
This has nothing to do with the retirement section not yet being available in step-by-step mode. The entries in forms mode that create the reporting of an excess-accumulation penalty are done directly in Part IX of Form 5329, so to get such a penalty being reported means that you made an incorrect entry there. Examine Form 5329.
The RMD entries on TurboTax's 1099-R forms serve only to indicate the amount that is ineligible for rollover. TurboTax has no way to determine the amount that you are required to have distributed. Your tax return only shows an insufficient amount distributed if you self-report the shortfall on Form 5329 Part IX.
Also, there have been no changes to these forms for several years. 2024 TurboTax is the same as 2023 TurboTax with respect to TurboTax's 1099-R form and 5329 form. With respect to RMDs, the entries in 2024 TurboTax will produce the same result as in 2023 TurboTax.
I have the same question and problem. In the past, there was just the question asking if you met the RMD. The entry forms for 1099s are now out today. Using Step-by-Step for my first entry brings up a page that appears to require you to make an $entry for the RMD (for that account). My distribution for that account is far more than required. I have several IRAs with large RMD but with $0 withdrawals since the RMD is covered by other accounts. There should not be a 1099R issued if no money was withdrawn, so there is no entry in TurboTax for these accounts. Additionally, I have distributions from fixed annuities. There is no true RMD as it's defined by the annuity. How do you make the entry on the page for the required RMD? Same as the known distribution?
I have a correction to my earlier reply. Form 5329 Part IX has changed for 2024, so the recently released version of TurboTax now has changes to the way that TurboTax handles the determination of a requirement to file Form 5329 Part IX. The developers made a mess of it for cases where the individual has more than one account that requires RMDs to be taken. If all RMDs were completed timely, it's possible to get the correct result by manipulating the numbers (entering as the required RMD no more than the gross amount of the particular distribution) such that TurboTax does not prepare Form 5329 Part IX. However, for someone with multiple independent RMD requirements for different accounts and only some RMDs were missed, TurboTax prepares an incorrect Form 5329 Part IX because TurboTax fails to include information about RMD amounts that were satisfied in full. This causes the Form 5329 to be incomplete although the correct penalty is calculated.
Still not certain why the change in the form now requiring entry of $ amount. Prior years you only had to click the radio button saying you took all the RMD required, and that meant the total, not referring to the individual accounts. You're right - this makes a mess of things. Still no way to figure what the RMD is for fixed annuities. The annuity does list a "fair market value" at end of each year, but I was told this is NOT a true account value, only a representative value if you had to purchase the annuity for that amount at that time.
They are trying to lead the user in determining whether the missed RMD is subject to a 25% excise tax (not corrected during the correction period) or instead to a 10% excise tax (the RMD taken late, during the correction period), changes brought about by the SECURE 2.0 Act becoming law. However, the penalty is assessed on the aggregate amount subject to the 25% excise tax and the aggregate amount subject to the 10% excise tax, so trying to make the determination on a 1099-R-by-1099-R basis doesn't really work for IRAs and, separately, for 403(b)s, where RMDs can be aggregated and the total RMD taken from only one of each of these types of retirement accounts. To accommodate the cases where the RMD for one of these accounts is taken from another, the present implementation in TurboTax requires allocating the total RMD amount for one of these types to the different Forms 1099-R such that no entry of the required amount exceeds the gross-distribution amount (unless there actually has been a missed RMD, in which case it would make sense to allocate the missed amount to just one of the Forms 1099-R for that type of account (IRA or 403(b) of the individual).
Either there was some change on 09Jan25 to the algorithm for entering the 1099-R traditional IRA account data or I was likely answering their questions incorrectly. When I now do the following for my IRA account that did not withdraw its full RMD amount, I no longer trigger Form 5329:
This is a deficiency in TT. If take take less then the required RMD from one account but take more than the required amount from second account which in total more than satisfies the total RMD required, TT should know that and not generate a fine on the form 5329 - or even generate a 5329! The only way I could get around this was to set the RMD amount for each 1099-R to the actual RMD that was taken, and that erased all the data on the 5329's. And I cannot find anyplace else where my total RMD is listed on any of the forms.
Please fix this Intuit!
Not sure why TT changed the program this year generating the problem. Why didn't they leave well enough alone?
TurboTax made changes because the IRS changed Form 5329 as a result of tax-code changes introduced by the SECURE 2.0 Act. However, the changes made by TurboTax were ill conceived due to a lack of understanding how RMDs are permitted to be satisfied.
Hey guys I think I've resolved the issue of the doubled RMD. It asks for how much is your minimum contribution. Do not get confused by this question and enter the full amount you're expected to contribute. You are supposed to enter the amount for each form that you contributed. Entering the full amount on each form will cause incorrect numbers.
I just ran through my return again on February 13 and found that they have still not fixed the bug!! Further more, I see no evidence that they even recognize the bug! I gave up on TT correcting the problem. TT still only includes one of my 1099-R's on form 5329-T. If you follow the TT process and check either box, you will overpay your taxes.
I fixed this by manually addiing up my RMD's and Distributions from the four 1099-R's and entering the totals on form 5329-T. Override line 52a with the total RMD and line 53a with the total Distributions. You can't trust TT to do this form correctly!
Why would you even need to use Form 5329T if you made your total RMD for the year? I just put in the required RMD for the 1099s I received, and entered the distribution to equal those amounts. Most of my RMD was from an account i made transfers from but took no distributions. Total distributions from the 1099 accounts added up to all my RMD needed.
I neither need nor want a 5329. Turbotax erroneously generated one and included a large tax fine because it cannot add all of the IRA distributions which were taken and determine that those in total are more than the required RMD.
Here is an example:
Acct # 1, required RMD = $3,000.
Acct # 2, required RMD = $17,000.
Total RMD = $20,000
Distribution from Acct # 1 = $9,000
Distribution from Acct # 2 = $11,000
And while this is acceptable according to the IRS, TT generates the 5329 and the fine. Intuit, please fix!
Good luck getting TT to fix anything. I found 2 bugs and tried to report but there was no online mechanism and very long time on hold and got nowhere. I asked on this forum if TT monitors our posts, and was told yes, but apparently the monitors are not the right people to get anything fixed. Sad way to run a software company
Three weeks since the last post on this issue, and I still cannot file my taxes because of this bug. TurboTax mistakenly calculates a $6000+ penalty. It's inconvenient that TurboTax hasn't fixed this even though it's been known for a month or two now. But what's really inconvenient is that TurboTax has not made the information easily accessible to its front-line techs. I wasted about three hours dealing with techs who were using my tax return to 'discover' and document the bug as if I were the first person to encounter it. I don't know why it's so hard to fix this, but it seems like it would be fairly easy to trigger a warning that this is a known bug.
This seems like a major screw up by turbotax, or has the IRS created a requirement that is impossible to fulfill? After several years of using TT, I may have to go back to a CPA.
enter one 1099-R for amount of distributions and withholding and state 100% of that is RMD.
discard the other 1099-R documents .
How hard is that?
I assume you mean to aggregate all 1099-R forms into one entry in TT and make no entries for the ones discarded? That might get around the TT problem but I think the IRS might have an issue if distributions are not reported from each institution that submits info to the IRS.
I agree aggregating the forms isn't going to fly with IRS. I have 3 accounts but only 2 1099's 5498's were filed with IRS on all 3 accounts so IRS is going to want to know disposition of each account.
Account 1 account has no 1099 R since there wasn't a withdrawal but an RMD is required, but the required amount is more than covered by one of the others.
Account 2 has a 1099 R but the withdrawl didn't cover the whole RMD
Account 3 covered itself and all the others with excess withdrawal to spare
I have NO Clue how to get TT to correctly handle this. I would greatly appreciate advice. This is such a poor interface, I am amazed we even have to have a discussion like this.
"aggregating the forms isn't going to fly with IRS. "
as long as withholding on file with IRS matches withholding you report, IRSwill be satisfied.
For example taxpayers making up 2025 1099-R with code PJ that does not exist get approved.
The 1900-R documents you enter into tax software do not go to the IRS.
That would probably work, fanfare. It's probably even easier for each taxpayer to do that than it would be for TurboTax to fix its code. Luckily, most of those affected probably realized TurboTax couldn't accurately compute their tax bills. I wonder how many didn't and how many will make inflated tax payments in the weeks ahead as TurboTax fails to warn customers that its software doesn't necessarily calculate taxes correctly. Based on my experience, the frontline tech support people don't even know that TurboTax cannot necessarily calculate a tax payment.