Inherited IRA and RMD

[danasmith474]

I was one of 3 children that inherited my mom’s IRA when she passed away in June 2020. Per the IRS rules I did not have to take an RMD in 2020, 2021, 2022 or 2023.  I took a distribution in 2024 of about 20% of the account balance.   When doing my taxes I entered the amount I took out and it then asks me the amount of the RMD.  If I enter the full withdrawal amount my taxes go up 25% of the withdrawal amount even though I already had 20% deducted from my distribution.   I already double checked that this is an inherited IRA due to death and the year of her death.   Should I enter an amount in the RMD field and if so why am I being double taxed in the amount ?

[DianeW777]

It depends. Check to be sure you have checked the IRA box in the entry of Form 1099-R. Also, that you checked you have taken all of your required minimum distribution (RMD) for 2024. There should be no penalty since you have taken the full amount of your RMD per your administrator of the account. When testing your example there is no penalty calculated.

The tax on the amount should be the rate of tax your taxable income is at.  See the tax tables in the link below to check your tax rate for 2024.

• IRS Tax Tables and Tax Rate Schedules

Review your tax return by taking a preview. You should see the income on line 4a and 4b and no penalty on line 8, Schedule 2. You have access to all forms when you choose to print your return in TurboTax Online/Mobile.  However you are required to pay before printing, but do not have to file until you are ready.

• Can I print a copy of my return in TurboTax Online before filing?

If you are using TurboTax Desktop you can switch to Forms and review all forms and worksheets.