How do i file a form 5329?

Forum|Forum|6 years ago
February 18, 2020
3 replies
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TurboTax Self Employed Online

BillM223

Level 15

TurboTax generates the 5329 if it discovers that you owe extra tax on a variety of situations, such as excess contributions to an HSA, early distributions from a retirement plan, failure to distribute Required Minimum Distributions, and so on.

Then TurboTax attaches the form to your return.

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minipele8

Level 2

@BillM223 Is there a way to view or confirm that the 5329 is added to my return? I had to remove excess contributions from my Roth IRA, but not sure where to put this info so TurboTax knows that I owe extra taxes/penalties.

DavidD66

Level 15

You can review your Form 1040, and see if any tax from Form 5329 is showing up on Schedule 2, line 6. To view your Form 1040, while logged in to your return:

Click on "Tax Tools" on the left of your screen
Click "Tools" from the drop down menu
Click on "View Tax Summary"
Click on "Preview my 1040" on the left hand side of screen

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Marty20

Level 2

I just found out that I contributed an excess of $547 into my 401k in 2019. I had 2 employers using 2 different brokers to manage 401k (Vanguard & Fidelity) Unfortunately, I'm no longer with either employer and I closed my 401k plans, rolled over 100% of the funds to IRA and consolidated all the money with a separate broker. r. I've been on the phone all day calling and explaining the situation and it's taking too much time and effort and each broker is pointing his finger at the other one to generate 1099R to fix the problem. I rather pay the 6% penalty and get over with this dilemma. Turbo Tax informed me about the excessive amount and how to fix it (1099R) but I don't want to deal with the 1099R headache of fixing this problem for the next 2 years (principal & earnings calculations, etc.). How can I force Turbo Tax to generate a 5329 and pay the penalty and get over with this complicated matter? I'm assuming it's a one time penalty on the $547 which is about $33? Right? Thanks!

macuser_22

Alumni - Champ

An excess deferral in a 401(k) CANNOT be remedied with a 5329 form. Because you failed to request a return of the excess before April 15 and because it is no longer possible for the 401(k) plan to return the excess, you will have to report that excess as taxable income on the 2019 1040 form line 1 as if it has been returned.

Since you rolled to to an IRA (Traditional I assume) you will have to pay tax on that money again when finally withdrawn. That double tax is the penalty for not properly removing the excess from the 401(k) plan in the proper method in the time allowed.

Without a 1099-R, TurboTax has a special way to do report it.

Excess 401(k) deferrals should be reported in:
(There are several screens to click through to get to the right place)

Miscellionious Income ->
Other Income not reported on a W-2 ->
Other wages (yes) ->
House Hold employee (Continue) ->
Sick Pay (Continue) ->
Other earned income (yes) (Includes excess salary deferrals)->
Source of income (other) ->
Any other income - enter the amount of the excess deferral and an explanation.

This will add the returned excess to your 2019 wages on line 1 on the 1040 form.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

Marty20

Level 2

Thank you for your response. According to Turbo Tax, the new deadline for requesting/receiving the excess contribution is July 15, 2020. So technically I still have time to request the money back. It gets a little bit complicated since the 401k funds got rolled over to a traditional IRA account. Can I ask the brokerage firm to withdraw the excess from my IRA? And eventually calculate the earning/loss on the excess for next year's return.

Should I follow your method below to report the $547 excess 401k contribution which will be added to my wages & salaries (1040 line 1)? Thanks!

vasantraga65

Level 2

Vanguard failed to withdraw RMD from my wifes IRA account. They are saying file form 5329. I am in the middle of preparing our tax return in Turbotax. I want form 5329 included in the tax return Where do I find it in the tax return for completion.

DianeW777

Level 15

If you do not have a 1099-R to file you must include form 5329 when you e-file and unfortunately this can only be done using the "Forms" mode which is only available with TurboTax CD/Download.

You can change to TurboTax Basic CD/Download if you choose.

How to switch from TurboTax Online to TurboTax CD/Download?

Once this is completed here are the steps to add Form 5329 to your return.

Enter the forms mode and click on open form (left). Type in 5329.
Choose 5329-T for the taxpayer (first person listed on your tax return), or 5329-S (for spouse - 2nd person on tax return)
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).
Then in the box right under line 53 "Waver of Tax Smart Worksheet" enter the same amount as line 52 (the RMD amount). Then click the "Explanation" button and enter the reason for missing the RMD and your statement requesting a waver.