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Returning Member
posted Apr 9, 2025 4:45:25 PM

Error with reporting RMD. TT calculates a $7000 tax penalty for timing. I can't correct it.

For my 2024 federal return I download the information for my RMD from my institution.  I withdrew all that I was supposed to long before the end of 2024, then gave most of it to charities.  So about $10K is taxable income.  It handles that fine, but then it makes errors on form 5329 and calculates a $7000+ tax penalty.  

 

It should not be using form 5329 (additional taxes on qualified plans) at all.  It seems to be thinking that I failed to take the full withdrawal in 2024.  But there is no way to debug it. 

 

I can't figure out how or why it is doing the calculation.  I tried deleting the data and downloading it again, but it didn't help.  I tried giving it a date for when I made the withdrawal, but it made no difference. 

 

Is there any way to manually enter data in a 5329 form to correct the error?

 

Thanks.  

 

0 2 1344
2 Replies
Expert Alumni
Apr 12, 2025 12:25:41 PM

Please follow these steps:

 

  1. Click on "Search" on the top right and type “1099-R”
  2. Click on “Jump to 1099-R” and enter your 1099-R
  3. On the "Required Minimum Distribution" screen enter RMD for this account 
  4. On the "How much of This Distribution Applied to your December 31, 2024 RMD" select "The entire distribution applied…"  / or select "Some of this distribution…" and enter the RMD amount (include the RMD amount that went to charity)
  5. Answer the "Transfer to Charity Screen"
  6. On the "Your 1099-R Entries" screen click "Continue"
  7. On the "Did You Miss a Required Distribution From Any Retirement Accounts?" screen select "None of these plans failed to withdraw the RMD" if you met all of your RMD for 2024. 

Returning Member
Apr 12, 2025 8:43:43 PM

Thank you for your response to my question.  I found the problem.  It turned out that when I entered my government pension, Turbotax assumed it was a second RMD, in addition to my IRA RMD.  That triggered form 5329 which calculated a whopping penalty for some reason or another.  I figured this out after hours of experiments with my IRA RMD reporting.  Finally I went to the entry for my pension and found the mistake.  Once I said it was not an RMD, it deleted form 5329.  Then the calculations for my RMD were correct.  Turbotax makes it increasingly diffecult to find and debug errors.