2024 RMD Excess Accumulation Worksheet Problem - TTax Deluxe

[domerdoc]

Why would you even need to use Form 5329T if you made your total RMD for the year? I just put in the required RMD for the 1099s I received, and entered the distribution to equal those amounts.  Most of my RMD was from an account  i made transfers from but took no distributions.  Total distributions from the 1099 accounts added up to all my RMD needed. 

[cjuhlman]

I neither need nor want a 5329.  Turbotax erroneously generated one and included a large tax fine because it cannot add all of the IRA distributions which were taken and determine that those in total are more than the required RMD.

Here is an example:

Acct # 1, required RMD = $3,000. 

Acct # 2, required RMD = $17,000.

Total RMD = $20,000

Distribution from Acct # 1 = $9,000

Distribution from Acct # 2 = $11,000

And while this is acceptable according to the IRS, TT generates the 5329 and the fine.  Intuit, please fix!

[domerdoc]

Good luck getting TT to fix anything.  I found 2 bugs and tried to report but there was no online mechanism and very long time on hold and got nowhere.  I asked on this forum if TT monitors our posts, and was told yes, but apparently the monitors are not the right people to get anything fixed.  Sad way to run a software company

[jaygourley]

Three weeks since the last post on this issue, and I still cannot file my taxes because of this bug.  TurboTax mistakenly calculates a $6000+ penalty.  It's inconvenient that TurboTax hasn't fixed this even though it's been known for a month or two now.  But what's really inconvenient is that TurboTax has not made the information easily accessible to its front-line techs.  I wasted about three hours dealing with techs who were using my tax return to 'discover' and document the bug as if I were the first person to encounter it.  I don't know why it's so hard to fix this, but it seems like it would be fairly easy to trigger a warning that this is a known bug.

[es3ov9tzwm8]

This seems like a major screw up by turbotax, or has the IRS created a requirement that is impossible to fulfill? After several years of using TT, I may have to go back to a CPA.

[fanfare]

enter one 1099-R for amount of distributions and withholding and state 100% of that is RMD. 

discard the other 1099-R documents .

How hard is that?

@es3ov9tzwm8 

[cjuhlman]

I assume you mean to aggregate all 1099-R forms into one entry in TT and make no entries for the ones discarded?  That might get around the TT problem but I think the IRS might have an issue if distributions are not reported from each institution that submits info to the IRS.

[debkrech2010]

I agree aggregating the forms isn't going to fly with IRS.  I have 3 accounts but only 2 1099's 5498's were filed with IRS on all 3 accounts so IRS is going to want to know disposition of each account.

Account 1  account has no 1099 R since there wasn't a withdrawal but an RMD is required, but the required amount is more than covered by one of the others.  

Account 2 has a 1099 R but the withdrawl didn't cover the whole RMD

Account 3 covered itself and all the others with excess withdrawal to spare

I have NO Clue how to get TT to correctly handle this.   I would greatly appreciate advice.   This is such a poor interface, I am amazed we even have to have a discussion like this. 

[fanfare]

"aggregating the forms isn't going to fly with IRS. "

as long as withholding on file with IRS matches withholding you report, IRSwill be satisfied.

For example taxpayers making up 2025 1099-R with code PJ that does not exist get approved.

The 1900-R documents you enter into tax software do not go to the IRS.

[jaygourley]

That would probably work, fanfare.  It's probably even easier for each taxpayer to do that than it would be for TurboTax to fix its code.  Luckily, most of those affected probably realized TurboTax couldn't accurately compute their tax bills.  I wonder how many didn't and how many will make inflated tax payments in the weeks ahead as TurboTax fails to warn customers that its software doesn't necessarily calculate taxes correctly.  Based on my experience, the frontline tech support people don't even know that TurboTax cannot necessarily calculate a tax payment.

[fanfare]

If turbotax adds a penalty to your RMD distribution(s) properly and timely taken, you can request a waiver of that penalty. This reduces the penalty to zero.

You will be asked to provide an explanation. Guess what, TurboTax supports the explanation statement.

Try not to flame on TurboTax too much in your verbiage.

[cjuhlman]

Is that right?  So I should have to go to the trouble to request a waiver for a perfectly legal situation that TT does not handle correctly?  I also note that in previous years, TT did not ask the question of the RMD amount, and there were no issues.  Perhaps if TT asked the question only once after all 1099-Rs are entered then there wouldn't be any issue either.  There are many ways around this issue, but generating a spurious penalty when none is warranted is offensive.

[jaygourley]

Fanfare knows enough about what his taxes are supposed to be that TurboTax is a valuable tool.  When it's right, it does most of the tedious arithmetic for him and when it's wrong, he can easily correct its mistakes.   But that leaves a key question unanswered.  Is fanfare saying that people who don't know enough about their taxes to spot TurboTax's mistakes shouldn't be trying to do their own taxes in the first place?  What if it's not obvious to a naive TurboTax user that TurboTax told him to pay thousands more than he owes.  Are we saying it's his own fault for trying to use TurboTax without the proper grounding in tax accounting?

[GregSNJ]

My problem is sillier.  In their calculation they are rounding the amount in some cases leading to a difference of $0.60 in the total required and taken.  So they consider it a gap of '$0' and require the form.

I have not found a legitimate (accurate) way to change the values to remove the problem.

[danasmith474]

Why when I enter the RMD for an inherited IRA does it then apply a 25% penalty to my taxes when technically I did not need to take an RMD or be penalized for not taking one for 2024?  This is very confusing!  Please explain in detail.  Thanks