I did not take the RMD before December 31 2021. But I have since taken this withdrawal. How do I report this?

[laingharoldg]

I know it is form 5329.  But I can't find it as a form in Turbo Tax and it is not listed as a form Turbo doesn't have

[ThomasM125]

Form 5329 is available in the desktop/download version of TurboTax. You can save your work you did in the online version of TurboTax so you won't have to re-enter it into the desktop version of the program. You can do this by using the Tax Tools menu option on your left menu bar in TurboTax, then Tools, then Save your return to your computer.

Here is a link where you can purchase the desktop version of TurboTax:

TurboTax download products

[fanfare]

It doesn't help you to buy TurboTax CD/download.

TurboTax doesn't support this situation if you don't have some 1099-R to enter and trigger the proper followup questions.

[macuser_22]

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@fanfare wrote:

It doesn't help you to buy TurboTax CD/download.

TurboTax doesn't support this situation if you don't have some 1099-R to enter and trigger the proper followup questions.

---

It can be done in the CD/download desktop version.

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

[laingharoldg]

Downloading the desktop version worked.  Even without the 1099, which you don't need to acknowledge the mistake, I was able to access the form, report the missed RMD, and provide the explanation for the missed RMD.  Thank you.

[blueeyes]

In the online version, you can enter a fake 1099-R, be sure to check the IRA box and use code 7 in box 7. Then answer the follow up questions pertaining to missed RMD. Go back and delete the fake 1099-R and the 5329 stays in the return. 

[schmittm]

Is the late RMD taxed in the year it was taken or in the year it was meant to be taken in?

[DianeW777]

Yes, it is taxed in the year it is received. There will be a penalty for 2021 so you will need to follow the steps 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.

@schmittm

[schmittm]

That worked like a charm.  Thank you!  I will add that software did crash when I was editing the "Explanation" in this form.  Nothing lost though, returned and finished it.