How do I get Turbo tax to pull up form 5329? I made a qualified withdrawal from my IRA for purchase of first home (code 09). I must enter form 5329 for this exception.

[bishonen111]

Please add first time home buyer exception language to your form 1099-R. The system should have had a question about first time home buyers expense exception and from there auto-generated form 5329. Please don't tell me I have to file with someone other than Turbo Tax because your system is incapable of producing the appropriate form for my situation.

[DaveF1006 · Accepted solution]

If you made a premature withdrawal from an IRA, the 5329 will populate automatically. First of all, make sure the IRA/SIMPLE/SEP box is checked in your 1099-R so that the questions  will appear. 

1. Assuming you have entered your 1099-R for your IRA and you checked the IRA/SIMPLE/SEP box.
2. Also the distribution code in Box 7 must indicate this is Code 1, no known exception. This will trigger a screen later in the interview that says Let's lower your tax Bill
3. Next screen will say Did you use your IRA to pay for any of these expenses? Here you will enter an amount under First home purchase (up to $10,000)
4. Next screen says Good News: Your Tax Bill Just Got Lower
5. Now you can verify that a Form 5329 is in your return by going to tax tools>tools>delete a form. Check your forms and form 5329 should be there. It was for me and should be for you.
6. Note a 5329 will not appear unless the IRA box is checked and if any other code other than code 1 is listed in Box 7 in your 1099R. 
7. Also if Code 2 is listed in Box 7, a 5329 will generate also but will not give you an option to put in your first time homebuyer information.

[bishonen111]

Perfect. Thank you Dave. This worked for me.

[ellegirl4]

Hi Dave,

I made excess contributions to a Roth IRA for 2021 and removed them prior to filling my 2021 taxes. I got my 1099-R and entered in my withdrawals and earnings into TurboTax. Form 5329 didn't populate. Do I need form 5329 in this case?

Thank you so much!

[RobertB4444]

If the 5329 didn't populate you probably don't need it but just for clarification what code is in box 7 on your 1099-R?

[ellegirl4]

Thanks for the quick help! The two codes included are 8 and J

[RobertB4444]

Code 8 is 'Corrective refunds taxable in current year.'  No 5329 needed.

[ellegirl4]

Thank you!!

[macuser_22]

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@RobertB4444 wrote:

Code 8 is 'Corrective refunds taxable in current year.'  No 5329 needed.

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But it was not just code"J", it was code "8J" and box 2a can have taxable earnings that were returned and the code "J" means that the the owner is under age 59 1/2 so it can be subject to an early distribution penalty requiring form 5329 unless there is an exception to the penalty or the owner is over age 59 1/2.

[ellegirl4]

Thank you for mentioning this! The early distribution penalty has been applied to the schedule 2, but no 5329 was attached by TurboTax. Is there a reason the form wouldn’t populate?

[macuser_22]

Look on Schedule 2 line 8.  If it says "No"   next to the amount then there is a penalty but the 5329 form itself is not required.

See the 1040  instructions page 98 for the exception to having a 5329.

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

[ellegirl4]

Oh, it does look like it's been included! I wasn't seeing it when reviewing my return, but it's listed in the forms list when I look at forms I can delete. I hadn't seen the option to view that list. Thank you for all of your help!

[THE_RichZ]

I completely forgot to make an RMD last year, and did not receive a 1099-. How do I get Turbotax to give me a 5329

[macuser_22]

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@THE_RichZ wrote:

I completely forgot to make an RMD last year, and did not receive a 1099-. How do I get Turbotax to give me a 5329

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You will need to file a 5329 form and request a waiver of the penalty. (The waiver would only be denied if there is no reasonable explanation and the missed RMD was not taken at all.)

Unfortunately this can only be done using the "forms" mode that is only available with the desktop software if you do not have a 1099-R to file.

If you do have a 2021 1099-R to report then the RMD question in the interview will go to the form 5329 waiver interview if you say that the 2021 RMD was not taken.

If you are using the CD/download version:

Enter the forms mode and click on open form. 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.

You will not pay any penalty now until the IRS determines if it will grant the waver, then they will inform you if you owe the penalty.

OR - if using the Online version and have no 2021 1099-R to file, you will have to prepare the 5329 manually .

Download the 5329 form from the IRS website and fill it out the same as above. Print and mail your return with the 5329 form and explanation attached as described in the 5329 instructions.

The 2021 5329 must be attached to your printed and mailed 2021 tax return and cannot be e-filed.

[NOTE: You can only use this method if you are requesting a waver of the penalty and there is no taxable amount on the 5329 form line 55 that must be transferred to the 1040 form]

From 5329 instructions:
Quote:
"Waiver of tax. The IRS can waive part or all of this tax if you can show that any shortfall in the amount of distributions was due to reasonable error and you are taking reasonable steps to remedy the shortfall. If you believe you qualify for this relief, attach a statement of explanation and file Form 5329 as follows.
1. Complete lines 52 and 53 as instructed.
2. Enter “RC” and the amount of the shortfall you want waived in parentheses on the dotted line next to line 54. Subtract this amount from the total shortfall you figured without regard to the waiver, and enter the result on line 54.
3. Complete line 55 as instructed. You must pay any tax due that is reported on line 55.
The IRS will review the information you provide and decide whether to grant your reques for a waiver. "

Download blank 2021 5329 form here:
https://www.irs.gov/pub/irs-pdf/f5329.pdf
https://www.irs.gov/pub/irs-pdf/i5329.pdf

[THE_RichZ]

Thank you. Hours on the phone with TurboTax help line, more hours with the IRA, the better part of two days basically wasted, and your answer solved my issue in minutes. Admittedly, most of the time on the phone was on hold or listening to menu choice recordings. I'll know better in the future, and go right to the Q&A stuff.

Thanks again.

THE_RichZ