Insufficient RMD was taken - how to fix

[CDJones4]

I  have two RMDs and I always aggregate them and take different distributions from each. I add the RMDs required for each using figures from my broker. I usually take more than required from one IRA, and less from the other, making sure that the totals added together amount to the amount required. I made a mistake this year and I didn't take enough and I still need to take a corrective amount of about $1,273.00. Turbotax has detected the discrepancy and presented an option to ask for a waiver on penalties. It asks a couple of questions and for a "reasonable explanation" you can enter in a box, and that's it. Is there anything else I must do? Is TurboTax filling out the required form 5329 and submitting it with the return? When I open Form and go to 5329, I find that my numbers and other info have been entered in the relevant boxes, so am I good? Will this all be filed with my return and I just need to wait for a reply on the waiver or is there something additional I must do?

[DanaB27 · Accepted solution]

Yes, TurboTax will fill out Form 5329 with the waiver and file it with your return. All you need to do is wait.

[CDJones4]

Thanks for the reply DanaB27. One more question. Should I make the distribution of the shortfall right away? 

[DanaB27]

Yes, you should take the missed RMD as soon as possible.

[CDJones4]

One more question. When I set up the corrective distribution should I allow normal federal and state taxes to be deducted or should I take the entire distribution to my bank account and worry about taxes on the distro next year? 

[fanfare]

For IRS waiver, IRS wants dates and amounts in your explanation statement telling what you did to resolve the problem.

If you think withholding helps you meet your tax, then you can request it. 

@CDJones4