I show a large penalty for not taking enough RMD in 2024. How do I find out what I did wrong and are there corrective actions I can take now?

To clarify, did you take all of your RMD for 2024? You can check with your custodian if you do not know.

 

If you did not take all of your RMD for 2024 then take it as soon as possible. TurboTax can help you apply for a waiver at the end of the retirement interview if you had a reasonable cause. 

 

 

If you did take all your RMD for 2024 but show a penalty on Form 5329 then please review your entries.

 

Please follow these steps in TurboTax Online:

 

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “1099-R”
3. Click on “Jump to 1099-R” and enter your 1099-R
4. Continue until "How much of the $XXXXX was a RMD?" screen and select "The entire distribution was an RMD"  /or select "Only part of this distribution was a RMD" and enter the amount of RMD (if this distribution includes RMD for other IRA accounts then you included the amount here)
5. Enter the RMD amount for this account on the "Let's get more information about your Required Minimum Distribution (RMD)" screen
6. On the "Review your 1099-R info" screen click "Continue"
7. On the "Did You Miss a Required Distribution From Any Retirement Accounts?" screen select "None of these plans failed to withdraw the RMD" if you met all of your RMD for 2024, otherwise select what is applicable. 

 

In TurboTax Desktop:

 

1. Click on "Search" on the top right and type “1099-R”
2. Click on “Jump to 1099-R” and enter your 1099-R
3. On the "Required Minimum Distribution" screen enter RMD for this account 
4. On the "How much of This Distribution Applied to your December 31, 2024 RMD" select "The entire distribution applied…"  / or select "Some of this distribution…" and enter the RMD amount (if this distribution includes RMD for other IRA accounts then you included the amount here)
5. On the "Your 1099-R Entries" screen click "Continue"
6. On the "Did You Miss a Required Distribution From Any Retirement Accounts?" screen select "None of these plans failed to withdraw the RMD" if you met all of your RMD for 2024, otherwise select what is applicable. 

 

 

Please see Can an account owner just take a RMD from one account for additional information.

If you only have RMD to report.

enter the amount distributed as the RMD amount,

 

I did take all of my RMD for 2024 but show a penalty on Form 5329. I reviewed my entries, but the form is still showing a penalty. Is this a glitch with the turbotax system? Thanks.

To avoid wrongful penalty, for each 1099-R, tell TurboTax that the distributed amount is the calculated required amount.

 

@gardnersusan 

Yes, I did that.

Did you answer all of the follow-up questions for each 1099-R you entered?   @gardnersusan   You should delete your 1099-R(s) and carefully re-enter them making sure to answer all of the follow-up questions.   

 

How to delete forms in TurboTax Online

 

How to delete forms in TurboTax Desktop

 

Where do I enter a 1099-R?