Does anyone know when the retirement section of federal returns will be ready in Turbotax? I just get the message "The retirement income section will be ready soon."

[nogimmees]

I just downloaded the update and it now includes the RMD calculations. Unfortunately I don't believe its calculating correctly. Although I returned my RMD back into my IRA account which should make it non-taxable, TurboTax is still calculating tax on the Gross RMD amount. Is this Gross amount be causing more of my SSA income to become taxable although the RMD is treated as non-taxable?

[nogimmees]

The new CARES tax changes are now available during the update. However my Taxes owed has changed significantly when using TurboTax deluxe although I rolled over my RMD distribution back into my IRA. This rollover should not be taxable. However, I owe more taxes when doing this rather than not  including any RMD distribution in 2020. Is this a problem in TurboTax as the IRS says the RMD is not taxed when returned to the original IRA account?

[SteamTrain]

@nogimmees 

The apparent solution to that is to go thru the questions again, but you need to indicate the distribution was NOT an RMD.    

Yeah, it's not immediately obvious, but since required RMDs were terminated for IRA (and most if not all 401k) withdrawals this year, you are not supposed to call them an RMD.

Perhaps sometime later this season, the software will be rewritten to better delineate when and when not to use the selection as being an RMD...but for now it isn't in there. .....or perhaps they may eventually include some more questions after selecting that the distribution was an RMD, that will clarify and post the $$ properly, but for now, they are not in there.

There are still 109R-R distribution forms that will be issued that are required RMDs, and not subject to the CARES legislation  (mostly standard pensions and probably most annuitized distributions that are paid-out automatically) .

[MissMCJ]

I use the Desktop version of TurboTax.  Then I use the to do my year end planning for the next year.  The forms will all be there.  If you try to do year end planning in the online or current desktop, you will run into the issue that forms are often not there until mid January or later.  

I did my year end planning for 2020 in the 2019 Desktop version.

[xmasbaby0]

The IRS is drafting new 1099R forms.  Then the software has to be programmed for them, and the IRS has to test and approve of the software.  It is a complex process because of the all the CARES changes.  It could even be a couple of months—sometime in January or even February.  Meanwhile if you are trying to plan, if you have 2019 desktop  (CD/download software) for 2019 use the what if feature- in Forms mode-but it will not have that CARES stuff.

You can also try using the Taxcaster tool:

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

There are a number of 2020 forms that are still being revised by the IRS.  Click on the REVIEW tab to see what form(s) you are waiting for and when it is estimated to be ready (when operational ….and dates are subject to change) ... 

IRS Forms Availability Table for TurboTax Individual (Personal) Tax Products

·         

State Forms Availability Table for TurboTax Individual (Personal) Tax Products

[geichelb1]

If the necessary forms are NOT available...WHY does TT make a big deal out saying it is ready and will be available around Thanksgiving? WHOA...I think I have the answer! They can charge everyone for software that is actually of no use!

If TT can not provide software that does what we need until February...fine, tell us that in November and DO NOT use the fact that you have our credit card information to book millions of dollars in sales before the end of the year.

[macuser_22]

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@geichelb1 wrote:

If the necessary forms are NOT available...WHY does TT make a big deal out saying it is ready and will be available around Thanksgiving? WHOA...I think I have the answer! They can charge everyone for software that is actually of no use!

If TT can not provide software that does what we need until February...fine, tell us that in November and DO NOT use the fact that you have our credit card information to book millions of dollars in sales before the end of the year.

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Why - because it is a marketing ploy.     Their competitors release early incomplete software so do they.   Tax software (including professional) is NEVER complete until January or February because of late tax law changes and the slow IRS process.

After the IRS releases the final paper forms (and some 2020 forms are still in the draft state at the IRS), it usually takes the IRS about 2-3 weeks to release the electronic form specifications that software companies must have to program.

[geichelb1]

I don't really care if it is a "marketing ploy"! I "subscribe" to getting TT every year, I don't know, care or pay attention to what other tax programs are doing. They could simply send a businesslike email saying they will make the software available, and charge us for it, when the IRS has completed their work.

Rather than a marketing ploy (no benefit to me), they use their announcement that TT is "ready" as a reason to charge the credit card. I strongly suspect that the version they first make available has only superficial changes from the prior year...but hey, it's worth nearly $100.00 to them whenever they want to say it is "sold".

I will be interested to see if "QCDs" are computed properly this year. I just finished explaining to the IRS that I filled in the taxable/not taxable entries on a 2018 1099 exactly per the TT instructions and entered the amount on the bottom line (QCD) of the 1099-R. Rather than deduct the QCD amount from taxable income as I assumed, apparently TT simply ignored that entry making AGI and everything else too high.

[macuser_22]

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@geichelb1 wrote:

I don't really care if it is a "marketing ploy"! I "subscribe" to getting TT every year, I don't know, care or pay attention to what other tax programs are doing. They could simply send a businesslike email saying they will make the software available, and charge us for it, when the IRS has completed their work.

Rather than a marketing ploy (no benefit to me), they use their announcement that TT is "ready" as a reason to charge the credit card. I strongly suspect that the version they first make available has only superficial changes from the prior year...but hey, it's worth nearly $100.00 to them whenever they want to say it is "sold".

I will be interested to see if "QCDs" are computed properly this year. I just finished explaining to the IRS that I filled in the taxable/not taxable entries on a 2018 1099 exactly per the TT instructions and entered the amount on the bottom line (QCD) of the 1099-R. Rather than deduct the QCD amount from taxable income as I assumed, apparently TT simply ignored that entry making AGI and everything else too high.

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TurboTax handled the QCD properly in both 2018 and 2019 if you entered it in the correct place.  There is no. change to the QCD part in 2020.  

On your 2018 tax return was the line 4b the 4a amount minus the QCD amount with "QCD" written next to line 4b?   You said the "bottom part of the 1099-R" - did you try to enter it directly on the forms in the forms mode?    The forms mode is not guaranteed for accuracy and voids the accuracy guarantee because it depends on user knowledge to properly link forms that the interview does for you.   The forms mode is intended for trouble shooting, not data entry.

The retirement interview is not complete because the necessary forms have not been released by the IRS yet.   There are many new and change forms for 2020 because Congress made many tax law changes.  The new 8915-E form that must be incorporate in the interview has not even passed the draft state at the IRS so expect delays for the 1099-R section.

Qualified charitable distributions.

A qualified charitable distribution (QCD) generally is a nontaxable distribution made directly by the trustee of your IRA (other than a SEP or SIMPLE IRA) to an organization eligible to receive tax-deductible contributions. You must be at least age 70½ when the distribution was made. Also, you must have the same type of acknowledgment of your contribution that you would need to claim a deduction for a charitable contribution.

If you are 70 1/2 or older, the interview will ask if you took the RMD. After that it will ask if you make a charitable contribution. Answer yes and then enter the QCD amount.

The 1099-R box 1 amount will go in the 1040 form line 4b (taxable amount) minus the QCD amount and the total box 1 amount will go on line 4a with "QCD" next to it.

Enter a 1099-R here:

Federal Taxes,
Wages & Income
(I'll choose what I work on - if that screen comes up)
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR Use the "Tools" menu (if online version left side) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

[SteamTrain]

While I somewhat agree with you that the software shouldn't be released until truly ready....however, a lot of forms can be ready for simple tax returns (W2- and interest only) long before the more complex ones with 1099-R, SE taxes and investmenstts..etc....so why should those millions of people wait.

..dealing with your final point abut QCDs

If you have trouble with the QCD this year, don't wing-it....come back and ask questions and detail how you entered it. and what the form 1040 actually shows for that IRA distribution in lines 4a and 4b of the 2020 form 1040.

Have no idea what went wrong with your 2018 QCD, and it would be tough to figure out in this forum without many details.....but it worked properly for many thousands of QCD folks in all prior years.

[refereeken]

I'm age 71 and the option to enter a QCD amount is not offered during the interview! (As of Jan 7, 2021.)  My wife is 74 and the QCD option works fine. I think they broke the QCD part of the program for those of us who are older than 70 1/2 but younger than 72.

[macuser_22]

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@refereeken wrote:

I'm age 71 and the option to enter a QCD amount is not offered during the interview! (As of Jan 7, 2021.)  My wife is 74 and the QCD option works fine. I think they broke the QCD part of the program for those of us who are older than 70 1/2 but younger than 72.

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This may indeed be a bug.

My quick test would seem to confirm that TurboTax has changed the 70 1/2 rule to 72 for RMD's as the CARES act changed for RMDS.   However, as far as I know, the QCD age remains for 2020, 70 1/2 but TurboTax does not allow it unless the age is 72 or more.

@dmertz can you confirm and do you agree?

[macuser_22]

@refereeken - As a temporary work-around, you can go to the personal information section and change your date of birth to 1948 (which makes you 72), then go the the 1099-R section and repeat the interview.  You should get the RMD question (say that none was required) and then the QCD question.  After entering the QCD (which should go to the 1040 form line 4a with "QCD" written next to it, go back to the personal information and change the DOB back to 1949 and the QCD will remain.

(I tested that and it seems to work fine).

[dmertz]

Yes, QCDs are presently broken for those who at the end of 2020 were between 70½ and 71½.  As, macuser_22 said, the only workarounds are to temporarily change the birthdate to something prior to July 1, 1949, enter the Form 1099-R and indicate the amount transferred to charity, then changing the birthdate back, or to enter the QCD amount on TurboTax's 1099-R form in forms mode.

[bobio02]

I have the same problem.  I've imported my RMD info from Vanguard.  When I go through the steps in Turbotax it asks if I have rolled over/back any of the distributions.  I answered yes, for I rolled all of them back into the original IRA accounts.  Turbotax then, in parentheses, states that I will not have to pay tax on these amounts.  BUT, near the end of the program it clearly states that I DO owe taxes on the full RMDs, even though they have been rolled back.  I spent about an hour on the phone with a Turbotax support person.  She was very polite, but after many tries could not find a solution.  Her suggestion was that on the form where it reports my RMD, on the next line I state that the full amount is non-taxable.  Turbotax ingests this information, but after the Review states that this is not correct and I can not yet file.  The support person's other suggestion is that I simply do not report the RMDs that were rolled back.  This might solve the problem, but I hesitate to do this since Vanguard has sent the required RMD forms to the IRS.  The end result would not be fraudulent, and financially correct, but still what I report and what the IRS has received would not mesh.  From all of this I have to believe that Turbotax has a problem that needs fixing, and that their support personnel, while polite, are poorly trained.  I hope they fix it soon.