I have multiple IRAs. In total I have withdrawn my full RMD but not the full RMD from one of my three IRAs. Why is TurboTax calculating a penalty?

[John_Bissell]

I was also asked about an RMD from my pension 1099-R. I just checked "no" or entered zero, I can't recall. It worked just fine. I don't know why TT is asking about a pension as my 1099-R did not have the "IRA/SEP" box checked.

[dmertz]

Pensions actually do have minimum distributions requirements.  The pension payments are determined by the plan such that they meet the minimum required, so these distributions are considered to be all RMD and the entire RMD required.  Because of this, it's not well known that pensions actually are subject to RMDs.

[tj-21]

dmertz,

Thank you for all your feedback provided on this topic.

Is it possible for you to look at my 2 questions that were before your response from John_Bissell ?

This is our first time taking a RMD, just not sure how to answer question:

***re-paste of question below:

Need help with in-putting of my husbands 1099-R.

-  This is our first year requiring a RMD, husband turned 73 in 2024.

-  Turbo Tax Premier asks for the amount that was required to be distributed by Dec 31, 2024.

-  Turbo then states:

"Do not include RMDs which are due on April 1. RMDs for the first year you're required to take distribution are generally due on April 1."

RMD due by Dec 31, 2024: ___________

My Question: We decided not to wait till April 1, 2024 to prevent reporting 2 RMDs in 2025. He took his RMD in Dec, 2024. I'm a little confused by the wording to not include RMDs due by April 1. Should I be entering our RMD  in the box for Dec 31, 2024??

Also, we took a bit more than our RMD by almost $300. If we are required to enter in the Dec 31, 2024 box, do I enter the actual RMD required amount or the total??

Add'l info: RMD Required: $33,703.28 but took $34,000. Plus additional $12,000 for Roth IRA Conversion. Box 1 on 1099-R : $46,000.

2nd Question:

We also receive one other 1099-R every year for his pension which we input separately in Turbo Tax. This year Turbo Tax asked if we had a RMD for his Pension?? Seemed kind of odd, thought it was due to his age, but we never heard of an RMD with a pension?? Any comments?

Thank you

yesterday

--Quick follow-up to my question above to clarify:

Which amount do I enter for the RMD?

The $33,703.28 or the $34,000.00, Is Turbo tracking the exact RMD amount??  I have impression we should use $34,000.00 ???

Thank you

yesterday

[dmertz]

It makes the most sense to enter $33,703.28 as the amount required, although entering any amount less than or equal to $34,000 would work just as well since $34,000 was distributed.  Since no part of an RMD required to be taken in 2024 went unsatisfied, the goal is to provide an answer that will prevent TurboTax from preparing Form 5329 Part IX, an any amount that is less than the amount distributed will do that.

Entering $34,000 would probably make more sense if the difference between $33,703.28 and $34,000 was used to satisfy the RMD for a different IRA.

[BobatINT]

I believe the answer is for pension plans that you should answer yes to the question whether it meets the RMD requirements even though the actual pension is determined by the persons age, years of service etc.

[BobatINT]

You made a good decision in taking the 2024 RMD in 2024. otherwise, you would be taxed on the 2024 and 2025 RMD in 2025. Basically, double taxation. anyway, first question: you should input the $33,703.28 as the RMD. You will be taxed on the full $46,000 but the $12,000 will no longer be included in the calculation for the following years RMD. The Roth Conversion I believe should be reported in the Deduction section of TT.

Second question: I think this has been answered already but go ahead and report the full amount of pension shown in box 1as RMD. That appears to now be the approach that is used since all companies with pension payments are meeting the rules for RMD. this is NOT an IRA and should not have the box checked for an IRA.

[BobatINT]

$33,703

[tj-21]

For RMD, should we Use Box 1 even if there is an amount in Box 2a (Taxable Amt) that's lower??

Or does it not matter???

Thanks again

On my husbands 1099-R for his pension:

Box 1 Gross Distribution = $40279.46

Box 2a Taxable Amt   =   $40201.58

Box 4 Federal Tax  =  $4020.18

Box 5 Employee Contribution = $77.88

Box 7  =   "7"I

IRA/SEP/SIMPLE Box   =  Empty (Unchecked)

[tj-21]

Sorry I fat fingered Box 7 Distribution Code:  "7"

[dmertz]

Form RMD purposes, what matters is the gross amount distributed.  The taxable amount is irrelevant with respect to determining whether you have satisfied your RMD.  All amounts distributed, whether taxable or not, go toward satisfying your RMD.

[tj-21]

Thanks for all your input everyone!

Does anyone know if Turbo tax keeps track of our RMDs every year like it does for our IRA contributions and  Roth conversions, after taking this 1st RMD??

People who have been taking the RMDs for a few years should be able to tell if Turbo Tax tracks this??

If it does, using our $34,000 vs $33700.28 number also be optional as "dmertz" says: 

"It makes the most sense to enter $33,703.28 as the amount required, although entering any amount less than or equal to $34,000 would work just as well since $34,000 was distributed.  Since no part of an RMD required to be taken in 2024 went unsatisfied, the goal is to provide an answer that will prevent TurboTax from preparing Form 5329 Part IX, an any amount that is less than the amount distributed will do that.

Entering $34,000 would probably make more sense if the difference between $33,703.28 and $34,000 was used to satisfy the RMD for a different IRA."

   Depending on how or if turbo tracks this info going forward, may influence the entry. Turbo Tax may want to know only our required RMD amount or track the total amount of RMDs taken regardless of the "required" RMD amount.

People who have been taking the RMDs for a few years should be able to tell if Turbo Tax tracks this??

Thanks

[dmertz]

TurboTax does not calculate or track RMDs.  TurboTax prepares Form 5329 Part IX based on the RMD information that you provide to TurboTax when your entries indicate that you have failed to satisfy an RMD that you were required to satisfy by year end. 

[ar10navt]

I am still getting a form 8329t. I have four IRA accounts. I receive letters from the financial institutions indicating what the RMD is for each account. I total these amounts and  withdraw the correct amount out of three of the IRAs to meet the rmd requirement. One IRA I don't touch at all because it is getting 5.5%.  

When I went through the income for 1099's Turbotax asked me if there was an IRA that I did not withdraw a rmd and then asked what that RMD was. It showed a total before I entered this which indicates to me it still did not total the 1099s correctly. When I entered this rmd for the account which I took no funds for,, Turbotax review indicated everything was fine. Yet I get this 8329T form .

I have checked the generated 1040SR  , I have checked the TurboTax 1099 worksheet and it is correct. As far as what I withdrew for RMD distributions.

I am somewhat cautious about  filing this Tax  Return.

Does H & R Block having these problems ?

[VolvoGirl]

You need to go back through the 1099R entries and revisit all the answers. There was an update on Feb 20, 2025 that fixed the RMD problems. The questions have changed so your prior answers won’t be right especially if you answered them with a work around to make them come out right.  I would delete the 1099Rs and enter them again manually.  That usually fixes it and resets the questions. Deleting has been fixing it for others.

[ar10navt]

We did that . Went over all the numbers etc.  

This is the last year I use TurboTax.