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gtbell007
New Member

Failed to take RMD for Inherited IRA in 2024. Can Turbo Tax help?

For tax year 2024, I took my inherited IRA RMD 3 days late on January 3, 2025.  I know I need to complete Form 5329 and attach to my Form 1040.  Does Turbo Tax account for this situation; meaning, will I be able to use this form in the online version?  Or do I need the CD version?  Also, in the IRS instructions, it states the person must enter "RC" on the dotted line outside the box for line 55.  Will Turbo tax allow me to type "RC" on the dotted line so I can request a waiver?  Other thoughts? 

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2 Replies
rjs
Level 15
Level 15

Failed to take RMD for Inherited IRA in 2024. Can Turbo Tax help?

You can create Form 5329 in TurboTax Online if you have a 2024 1099-R for an account other than the inherited IRA for which you took the RMD late. (But not quite yet. That section of the interview is expected to be available January 11.) If you have any Form 1099-R for 2024, after you enter all your 1099-Rs in TurboTax and proceed through the interview, you will come to a screen that asks you if you received all the RMD that you were required to take for 2024. If you answer that you did not, it will lead you through requesting the waiver and entering an explanation. In the explanation, in addition to a brief explanation of why it was late, be sure to say that you took the distribution in January.


Unfortunately, there is a defect in the TurboTax interview that makes it impossible to fill out Form 5329 if you did not receive any 1099-R for 2024. The only way to fill it out is in forms mode, which is only available in the desktop TurboTax software, not in TurboTax Online. That means you will have to use the desktop software to file your 2024 tax return.


Either way, Online or desktop, when you enter the amounts and the explanation, TurboTax will automatically put "RC" in the proper place on the form. You don't type it yourself. (You misread the IRS instructions. "RC" goes on line 54b, not line 55.)

 

dmertz
Level 15

Failed to take RMD for Inherited IRA in 2024. Can Turbo Tax help?

If you are subject to the 10-year rule for a decedent dying after 2019, the IRS waived the penalty for failing to take an RMD from the inherited IRA and no Form 5329 would need to be filed.  Otherwise, see the response by rjs regarding getting TurboTax to prepare the Form 5329 to request a waiver of the penalty.

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