I failed to take the RMD for 2023 on time and appear to be liable for extra tax at least for now. Turbotax has had me fill out form 5329 and noted the extra tax that may be due. It also had me fill out the explanation for the error to try to get the extra tax relieved. However, Turbotax does not complete Schedule 2, form 1040 and does not show any liability for the extra tax. Even on review, it is telling me there is no error. HOw can this be?
That's correct. When you request a waiver of the excess-accumulation penalty, which you have done, the penalty is not to be included in your tax liability when you file. In the unlikely event that the IRS declines your waiver request, the IRS will bill your for the penalty.
That's correct. When you request a waiver of the excess-accumulation penalty, which you have done, the penalty is not to be included in your tax liability when you file. In the unlikely event that the IRS declines your waiver request, the IRS will bill your for the penalty.
Thank you so much! I've learned my lesson on getting these RMD's done on time, and dealing with that error has been truly a real pain you know where. I have used Turbotax for years and they have always gotten it right. But the IRS instructions for form 5329 make it seem you have to pay upfront and then hope they will forgive the extra tax. I will proceed with filing just as prepared using Turbotax.