How can Turbo Tax's failure to recognize the non-taxable portion of my IRA RMD be corrected?

[DawnC]

Why is your IRA RMD nontaxable?  

Your required minimum distribution is the minimum amount you must withdraw from your account each year. You generally have to start taking withdrawals from your IRA, SEP-IRA, SIMPLE IRA, or retirement plan account when you reach age 72 (70 ½ if you reach 70 ½ before January 1, 2020). Roth IRAs do not require withdrawals until after the death of the owner.

• You can withdraw more than the minimum required amount.
• Your withdrawals will be included in your taxable income except for any part that was taxed before (your basis) or that can be received tax-free (such as qualified distributions from designated Roth accounts).

[8596Jd-]

Part of the RMD has been taxed and is shown as such in box 5 of the 1099R.  The tax software also askes for that differention as a subset to the full1099R input.  I have been using TurboTax to do my taxes and never had this problem before with this RMD.

[DaveF1006]

Can you provide a screenshot?

[8596Jd-]

Yes I could provide you with a screen shot.  But first let me describe the values in question.  On This RMD the value in box 1 is the gross distribution which is equal to the minimun required distribution for 2019. In box 2a is a value that is les than box 1 and is the taxable amount which is less than the figure in box 1  by the amount in box 5.  Box 5 is after tax dollars submitted over the life of the plan via paycheck deductions several years ago.  In the edit mode for this RMD entry there is  breakdown that confirms that the gross distribution is the RMD. but does not breakdown the taxable values. It completely misses the purpose of the value in 2a.

Later in the progression preparation of the Taxes there is a display that shows the total taxable value all  the RMD's and the taxable values of other entities.  The total taxable value of the RMD's shown is the sum of the gross value in box 1 of the subject RMD and the RMD of another unrelated IRA.

I have been using Turbo Tax every year since I had to start the RMD stuff. Never had this problem before.   It looks to me like the software is at fault.     Its getting late so I will check back in tomorrow morning.              

[Bill38]

None of the replies I have received address my issue.

I began receiving my RMD at 70.5 years. I have used Turbo Tax for at least 20 years with no problems. BUT 2 things happened that set me up for problems. There was no required RMD for 2020. Note that until then my non-taxable portion had been properly calculated by Turbo Tax. 2nd thing, my computer died and had to be replaced. I inserted my CD from 2020 and Turbo Tax recognized all my info and loaded it. Please keep in mind that my 2020 file did not have any RMD info at all. I have manually calculated the info for 2021 Form 8606 to determine the basis for the tax exempt portion of my RMD. in the input screen for RMDs I entered the total RMD from T. Rowe Price and entered the taxable amount in the box immediately below it. Turbo Tax does not recognize that info and therefore does no create a Form 8606.

I have CDs of my Turbo Tax created returns for several years.

[DaveF1006]

It depends. If any of these situations exist, 

1. You received a distribution from an inherited traditional IRA that had nondeductible contributions
2. You transferred an inherited plan account to a Roth IRA
3. You received a distribution from an inherited Roth IRA that was not a qualified distribution

then you'll have to download and print Form 8606, manually fill it out (instructions), and print and file your return, as you won't be able to e-file. If these don't pertain to you, you might try manually placing an 8606 in your return.

1. Go to the forms mode in your program. Click on open form in the left portion of your screen.
2. Type in 8606 in the box that says type in a form name.
3. Select either if it is 8606-T (you) or 8606-S if a spouse.
4. Fill in your address if it isn't already populated.
5. Scroll down to Traditional IRA Basis Smart Worksheet
6. Enter the basis for 2020 by selecting quick zoom. This will generate an IRA Informational Worksheet
7. Once that is done, your basis amount will show from 2020, down to the earlier years.
8. See if this works.
9. If you are unable to get the proper results from doing this, you may need to download and print the return according to the instructional link provided above and mail the return in for this year. We hope that you won't need to experience this.

[ Edited 02/09/22| 09:00 PMPST]

[Willie38]

So, after using Turbo Tax since the year 2000, this is the best a tax expert can offer? Sorry to have bothered you.

[Elbert Wilson]

Can

[DaveF1006]

Not so. If you have a hard copy of the 1099R and when you get to the first screen on how you want to enter, indicate you wish to type it in yourself. This does mean you won't be able to import but you can still enter the information in Turbo Tax.