How and where do I report on my 2016 return a 2016 Form 5329 Excess Distribution amount which Transamerica will distribute to me later in 2017?

[dmertz]

Excess distribution?  Are you asking about a return of excess contribution?  If so, Form 5329 might not be involved at all:

To what kind of account was the excess contribution made?
For what year was the contribution made?
In what year was the contribution made?
Has the account experienced investment gains subsequent to making the excess contribution?

[Opus 17]

Also, in most cases, if you make an excess contribution to a tax-advantaged plan of some kind, you only have until April 15 of the next year to take it out of the account in order to report it on your 2016 tax return.

[dmertz]

April 15 would be the deadline for correcting an excess deferral to a qualified retirement plan.  If an excess contribution was made to an IRA or HSA, the deadline is the filing deadline (including extension to October 16, 2017 if the 2016 tax return or a filing extension was timely filed).

[paul-carlino]

Big Mistake on my part - Excess Distribution should be Excess Accumulation.    I have an Excess Accumulation for tax year 2016.   I have prepared a Form 5329 requesting penalty waiver and will receive the 2016 Excess Accumulation later in 2017.    How and where do I self-report the 2016 Excess Accumulation on my 2016 tax return still to be submitted?

[dmertz · Accepted solution]

To maximize your chances for receiving the waiver, you'll want to wait until you've actually made the distribution before requesting the waiver.  The IRS might not treat intent to make the distribution as sufficient to constitute taking steps to make up the RMD shortfall.  It's best to be able to say in your explanation statement that you've already received the make-up distribution.  Your explanation should also describe your reasonable cause for taking the RMD late.  Note that this distribution taken in 2017 will be taxable on your 2017 tax return, along with the distribution that you take to satisfy the 2017 RMD.

If the is an RMD from an account that you own, are over age 70½ and you have entered any Forms 1099-R, after clicking the Continue button on the Your 1099-R Entries page TurboTax will ask you if you completed your 2016 RMD.  Enter the amount of late RMD and TurboTax will automatically prepare Form 5329 to request the waiver as described on the last page of the instructions for Form 5329, Waiver of tax.

If you have not entered any Forms 1099-R or are not over age 70½ (the RMD being on an inherited retirement account), it's extremely difficult to get TurboTax to ask you the necessary questions to prepare Form 5329 correctly.  It may be easier to prepare Form 5329 manually and attach it to your mailed tax return.  Otherwise, you'll need to enter a dummy Form 1099-R then click the Continue button on the Your 1099-R Entries page to force TurboTax to ask the questions relating to completing the RMD.  Just be sure that after getting TurboTax to prepare the waiver and deleting the dummy Form 1099-R that you do not again click the Continue button on the Your 1099-R Entries page since doing so can, depending on your age, cause TurboTax to delete some of the waiver information from the From 5329.