Dealing with insufficient RMD

[BJDisMe]

I did not take a large enough RMD in 2022 due to an oversight.  In order to make up the difference, I will need to take money from an IRA that I did not withdraw from in 2022 and hence have no 1099-R for. How do I deal with this in TurboTax?

[dmertz · Accepted solution]

I'll assume that this not the first year that you were required to take RMDs.  (If 2022 was the first year for which you were required to take RMDs from your retirement account, not an inherited account, the distribution is not late if you take it by April 1, 2023.)

Your question seems imply that you took some RMD in 2022.  After completing the late distribution and entering your 2022 Forms 1099-R, click the Continue button on the page that lists the Form 1099-R that you have entered.  TurboTax will ask if you completed your RMD for 2022.  Answer that you received only part of your RMD.  TurboTax will then allow you to enter the amount that you were required to receive and then allow you to request on Form 5329 a waiver of the excess-accumulation penalty.  In the explanation statement indicate that you have now taken the late distribution.

The late distribution itself will be reportable on your 2023 tax return when you receive the 2023 Form 1099-R.

[BJDisMe]

Thank you! Am so glad that TurboTax can handle this situation!

[kenterickson]

I went through the steps you mentioned but after filling in the amount and the reason for the shortfall nothing happened.   I am not offered the Form 5329 and when I continue to the Smartcheck it says that there is no difference between the original and the amended return.  I did wait until today, February 16th for the amended return capability to be available in TurboTax.     What am I missing?

[BJDisMe]

I can’t help you. The steps that someone provided  in response to my question about an insufficient RMD seemed to work for me.

[JulieS]

No, TurboTax won't see the difference between your original return and your amended return because the refund is the same, but the forms should still be there. You won't be able to e-file your amendment, but you can print and mail it. 

If you are using TurboTax Desktop (from a disc or download), you can just click on Forms toward the upper right corner. Find 1040-X and 5329 in the list and print them. 

If you are using Turbotax Online, you can print the return from the Print Center and look for your 1040-X and Form 5329.  
 
In TurboTax Online if you have paid, you can generate a PDF of your tax return from the Print Center:

1. Click on Tax Tools at the bottom of the left side menu.
2. Select Print Center below that. 
3. Click on Print, save or preview this year's return. 
4. You will be prompted to pay, if you haven't yet.
5. Select the option to include Government and TurboTax worksheets. 
6. A PDF will be generated, which you can save or print for review. 
    

Mail it to the address for your state. Click here to find yours. 

[fanfare]

review your revised tax return list of tax forms to check for Form 5329

you should be mentioning 5329 in your Part III explanation.

If you e-Filed 1040, you can e-File 1040-X

I believe it is only once allowed, so make sure it is right.

reply back if you need to file 1040-X on paper. the process is simple in this case.

@kenterickson 

[kenterickson]

I now wish I had been more patient in dealing with this.    After the first two replies didn't make it absolutely clear to me I called TT and had a session with an agent.    She pointed out where to find the forms I need to file and I thought that I was all set.   So I completed the 5329 and sent all the forms she recommended:   1040, 1099s, proof of makeup withdrawal from my financial institution, and a cover letter.    She didn't say 1040X so in my ignorance, I sent a copy of the original 1040.     Now I'm probably in a bind.   I am not happy with the support I received from TT.    She should have sent me a simple and explicit list of what I needed to do.

[fanfare]

you filed twice.

This happens. IRS will figure it out.

If you are expecting a refund and did not get it already, it could be delayed indefinitely.

@kenterickson 

[fanfare]

For future reference

when filing 1040-X by mail,

do not include your old 1040 nor your revised 1040 because the Form 1040-X reflects any changes there and becomes your new tax return.

you could have just mailed in the Form 5329 alone along with explanation. see bottom of Form 5329.

@kenterickson 

[jgrudin]

I am in the category of first year from my retirement account though I have had an inherited before. I did take the RMD out in January. Shoudl I fill out the Form 539? I have read it should be accompanied with a letter. I have a PDF from a financial advisor explaining it. SHould this be attached or can I type in the information? Thanks.
Jonathan Grudin

[ShirlynW]

No. You should not fill out Form 5329. Required Minimum Distributions (RMDs) are the minimum amounts that IRA and retirement plan account owners generally must withdraw annually starting with the year they reach age 72 (73 if you reach age 72 after Dec. 31, 2022). You stated  you did take the RMD in January.

Form 5329 is the tax form used to calculate possibly IRS penalties  and possibly request a penalty waiver. 

You use this form in three situations:

• Early distributions from a tax-favored account
• Excess contributions to a tax-favored account
• Failing to take required minimum distributions.

For more information

[VolvoGirl]

If 2022 was the first year you had to take a RMD you can delay it until April 1 of the following year.  So you were not required to take it in 2022.  Don't forget to also take your 2023 RMD by Dec 31.  So you will have 2 RMD to report next year.  You may get both on one 1099R next year.  

[jgrudin]

Thank you.

[jgrudin]

I have one more question. I missed taking my first RMD in 2022, but took it in February, before the April 1 deadline. Should I do nothing, or should I file Form 5329 with explanation, or do I not need to file Form 5329? Thank you, you are a great help.