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jimyorio
New Member

How can I reduce my penalty for an insufficient RMD withdrawal ?

Can the IRS penalty on an RMD be reduced?
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1 Reply
DianeW777
Expert Alumni

How can I reduce my penalty for an insufficient RMD withdrawal ?

It's possible if you meet the requirements and take steps to complete the amount of RMD.

 

Yes, the penalty may be waived if the account owner establishes that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall. In order to qualify for this relief, you must file Form 5329 and attach a letter of explanation.  See the instructions to see if you qualify.

 

If you did not have the 1099-R for 2024, then TurboTax would not realize Form 5329 should be added to your tax file. You would have had to add the Form 5329 to your tax file manually. Use the link below to show you how to add a form in TurboTax Desktop:

The good news is that you can still add this to your tax return if you already filed and it is allowed to be a 'stand alone' form.  Simply add it to your return, print that form, sign it and mail it to the IRS by itself. 

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