Follow-up on RMD answer - just to be clear

[ldh652]

Hi, this is a follow up to the very good answer re. a forgotten RMD distribution.  I thought I had taken my RMD by selling stocks, but it was put in the sweep account, which I think makes it unqualified. Anyway, I have not received a 1099-R, so I'm assuming that's the case.  Is it correct that I can take it now and make sure I record it in my next year's taxes so that I pay the required amount if I'm not requesting the penalty? (It's only $180 -- this is a very small brokerage account that is under $4,000 -- I should probably close it). Or, do I need to fill out the 5329 and file a paper return this year since I have the downloaded version of TurboTax? I want to be correct with this, even though it's a ridiculously small amount to cause all of this angst!  Thank you.

[ldh652]

P.S. Also, if I withdrew more than the required RMD from anothe retirement account that is more than the forgotten RMD for this account, can that cover the error?  Would I still need to file a 5329?  Thanks.

[DanaB27 · Accepted solution]

If these are IRAs then yes you could take all the RMD from just one account and meet the RMD. Therefore, you do not need to file Form 5329.  But if you have other retirement plans, like 401k, then the RMD has to be taken separately from each of those plan accounts (IRS).

If you haven't taken all of your RMD then take it as soon as possible. This distribution would be reported next year on your 2025 return.

You will need to file Form 5329 and request a waiver of the penalty if you have reasonable cause. Please see Relief for Reasonable Cause for additional information.

If you do not have a Form 1099-R to file this can only be done using the "forms" mode which is only available with the TurboTax Desktop software:

1. Enter the forms mode and click on "Open Form" and type "5329".
2. Scroll down to Part IX line 52 and enter the RMD amount that should have been taken. On line 53 enter the amount of the RMD that was actually taken (probably zero if it was missed).
3. Then in the box right under line 53 "Waiver of Tax Smart Worksheet" enter the same amount as line 52 (the RMD amount) under A. 
4. Click the "Explanation" button and enter the reason for missing the RMD and your statement requesting a waiver.

If using the TurboTax Online version and have no 2023 Form 1099-R to file, you will have to prepare the 5329 manually.

Download Form 5329 from the IRS website and fill it out the same as above. Print and mail your return with the 5329 form and explanation attached as described in the 5329 instructions.

The 2024 Form 5329 must be attached to your printed and mailed 2024 tax return and cannot be e-filed.

Please be aware that you can only use this method if you are requesting a waiver of the penalty and there is no taxable amount on Form 5329 form line 55 that must be transferred to Schedule 2 line 8.