How do I include form 5329 when I e-file with TurboTax?

[ThomasM125]

@epcot 

To report the earnings on your retirement distribution, you can make an entry for a substitute form 1099-R in addition to the normal entry, and put the earnings in box 1 and box 2(a). You will see an option to create a substitute form 1099-R on the screen that says Tell Us Which 1099-R You Have when you go to enter the form 1099-R. Code the substitute form 1099-R as "J" in box 7, for early distribution from a Roth IRA.

You will need to provide an explanation for the substitute form 1099-R explaining that the original form was not correct and the broker refused to amend it.

[fschmits405]

how do i include 5329 with return with turbo tax

[fschmits405]

can't find search o n return screen

[KrisD15]

You may click "Other Tax Situations" along the top of the screen

Scroll down to "Additional Tax Payments" 

Scroll down to the section you need, I assume "Extra tax on early retirement withdraws" and click Start or Update. 

If you enter an early withdraw from a retirement account, the program should generate a Form 5329.

[pcarlson9]

Slightly different question regarding form 5329.

In 2021 I found I had a $144 excess contribution to my Roth for my 2020 taxes. I removed it and the earnings ($13.17). I entered the 1099-R data as if I had received one ($157.17 in box 1, $13.17 in box 2a, codes JP in box 7 and indicated the 1099-R was for 2021. Everything matched when I actually got the form this Jan). TT created form 5329 for the excess and I paid tax on the earnings of $13 rounded down. (I'm over 59 1/2 so no penalty on the $27 withdrawal) 

Thank you to all the helpful people on these forums for helping me with that process.

Now 2022 is here and I have another much smaller $27 excess contribution to my Roth for 2021 (I quit making contributions last Feb so this will be the last time I have to deal with this). I removed the $27 excess plus earnings of a whole whooping .38 cents! I entered the 1099-R info as if I'd received it just like last year.

But this time TT Did Not generate a form 5329. 

Is this because the earning were only .38 which would be rounded down to zero? Therefore no taxable earning and a 5329 is not needed? I don't want to click file and find out 5239 was needed?

FYI The $27 was added to Form 1040-SR line 4a Ira Distributions, but was not included in the taxable amount on line 4b so I know the 1099-R info is in there.

[RobertB4444]

If there is no information to enter on 5329 (.38 rounds to zero, as you said) then there is no reason to include the form.

[creedeelk]

I need to file a Form 5329 for a missed MRD for Tax Year 2021.  Turbo Tax does not appear to allow attachment of the Form 5329 for Tax Year 2021.

[creedeelk]

I cannot open my tax file.  I suspect it is because I have not yet paid the filing fees.  Is this true?

[HeatherPLO]

@creedeelk

Are you getting an error message when trying to open your file?  Please post here in the thread and someone will reach out with the next steps. 

[larryllll]

How do I include form 5329 when I e-file with TurboTax?

[DianeW777]

It depends.  If you know you have the penalty for not taking your required minimum distribution (RMD) in 2021, AND you did not receive a Form 1099-R in 2021, you can use the information below.

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 if you do not have a 1099-R to file.

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.

1. Enter the forms mode and click on open form (left). Type in 5329.
2. Choose 5329-T for the taxpayer (first person listed on your tax return), or 5329-S (for spouse - 2nd person on tax return)
3. Scroll down to Part IX line 52 and enter the RMD amount that should have been taken.
4. On line 53 enter the amount of the RMD that was actually taken (probably zero if it was missed).
5. 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.

@larryllll

[Edited: 03/10/2022 | 9:38a PST]

[samamehta]

I manage to include 5329 by inserting one dollar answering RMD question. TT prompts you to fill out the shortage. you put in the amount you missed. it then asks for RC-Reasonable cause for not filing. That is it. TT will fill out the rest for you and file with the e-file. 

[sscamaro]

I need to file a form 5329 for exceeding the MAGI limits for a ROTH IRA in the tax year ending in 2020.

Can I generate the form in TurboTax Deluxe 2021 to calculate the penalty and interest due because of this error made in the tax year 2020 and submit the form 5329 with my 2021 tax submittal? Or do I need to generate the form 5329 in the tax year 2020 in Turbo Tax and submit with my 2021 tax return or submit separately with no 1040 tax return? In either case, I’d rather not use the forms mode since what I’ve experience thus far, the form 5329 isn’t tied in with the step by step method,  permitting a flow of data entries from the step by step method to generated form 5329

I will be re-characterizing a 2020 ROTH IRA, that I was not allowed since I exceeded the MAGI limits, to a Traditional Non-Deductible IRA in the tax year 2020, for which I understand does not have any MAGI limitations, correct?

Since this correction is for the tax year 2020, and no deduction was taken since it was a ROTH IRA in 2020, I’m assuming this can be handled by not preparing an amended 2020 Tax Return, Correct?

I’ve requested the re-characterization for this 2020 Roth IRA to a Traditional Non-Deductible IRA from the Mutual Fund that is holding the ROTH IRA. I assume they will be sending out amended/corrected 1099-R’s and whatever forms needed to process the change in Turbo Tax or will I need to perform detailed analyst of the disallowed 2020 ROTH IRA to provide figures needed such as the value of the 2020 ROTH IRA and any earned Income/Loss, etc..

I’m using the Deluxe version of Turbo Tax; will upgrading to the  Premier version provide me with additional guidance in preparing form 5329 for the issue I’m trying to resolve?

[GeorgeM777]

No, you will not submit a Form 5329 with your 2021 tax return because it appears that you are effecting the recharacterization in 2022.  Your 2022 tax return will include Form 5329.  However, you do need to withdraw the funds from the Roth IRA to limit your penalty/interest exposure.  

Yes, a traditional IRA has no income limits.  You may not be allowed to deduct your IRA contributions if you, or your spouse, are covered by a retirement plan at work and your income exceeds certain limits.  However, you can still contribute to a traditional IRA regardless of your income amount.

Because you are effecting the recharacterization of the Roth IRA in 2022, you will report the various changes you made to your Roth IRA on your 2022 tax return.  You will likely receive a 1099-R from the Roth IRA custodian and the amount you withdrew (in order to make the recharacterization) will be included on that 1099-R.  You won't need to make complicated calculations.  TurboTax will essentially "walk" you through the steps to enter your information and will calculate the penalty if any.

TurboTax Deluxe cd/download versions and the TurboTax Deluxe online version both include Form 5329.  TurboTax Deluxe will provide you with the same guidance as TurboTax Premier.  

@sscamaro

[hassanhyounes]

I do not see the link Jump to form 5329.