Form 5329-t generated when not needed.

Forum|Forum|2 years ago
February 10, 2024
19 replies
122 views

When doing my 2023 Income Tax I noticed that TurboTax Deluxe Desktop generates form 5329-t entering a value on line 2 of Part I, with an exception number of 12.

This is being generated automatically after entering a 1099-R with the distribution code in box 7 being a "U". This distribution is already exempt from early distributions, and it is not an early distribution as I am older than 59 1/2.

When I look at the IRS instructions for Form 5329, it says that exception 12 is for "Distributions incorrectly indicated as early distributions by code 1, J, or S in box 7 of Form 1099-R. Include on line 2 the amount you received when you were age 591/2 or older." Exception 15 is "Distributions that are dividends paid with respect to stock described in section 404(k)" which is what a distribution code "U" is in box 7 of the 1099-R.

I've had this same Distribution coded U in the past few years and Form 5329 was never generated before, however when I opened up my previous two years TT programs, there was an update that took place and now form 5329 is generated for my pervious taxes. When I look at my printed tax form there is no Form 5329.

Why is TurboTax generating this form when it is not needed?

Thanks,

dmertz

Level 15

A properly entered Form 1099-R with cod U in box 7 does not cause TurboTax to create an entry on Form 5329. If you are using the CD/download version of TurboTax, make sure that you are not making entries in forms mode. If all else fails, delete your Forms 1099-R, delete the Form 5329, then reenter the Forms 1099-R.

GJS60Author

Level 2

dmertz,

Thanks for your reply.

I have started 3 new tax returns and only used the Step-by-Step view to answer the questions, and whenever I use code U in box 7 when entering Form 1099-R TurboTax does create Form 5329-T.

As I stated it enters the amount from line 1 of the 1099-R on Form 5329-T in Part I, Column A, Line L in the "Distributions Not Subject to Additional Tax Smart Worksheet" and also on line 2. It also enters exception 12 on line 2 as well.

I agree that it should not generate Form 5329-T, but I have tried it several times and it always generates Form 5329-T when box 7 is set to code U.

I have entered the form 1099-R using code 7 in box 7 and no Form 5329-T is generated, then if I go in and edit the 1099-R and make box 7 a U Form 5329-T is then generated.

Have you tried this recently? It happens to me every time. I think there is a bug in the program.

I also did what you suggested, deleting Form 5329-T and the 1099-R and reentering it, but again the same thing happens.

Please help.

Thanks

dmertz

Level 15

I was not able to reproduce the symptom with either the CD/download version or the online version of TurboTax. When I created a tax return for someone age 33 with the only income being a Form 1099-R with an amount in box 1, the same amount in box 2a, no box 2b boxes marked, code U in box 7 and the IRA/SEP/SIMPLE box unmarked, Form 5329 was not produced.

Do you have any other Forms. 1099-R entered? There have been a few occasions over the years where TurboTax has had some bizarre interactions between Forms 1099-R, although all of those I'm aware of have been resolved.