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Extra tax on RMD

I have one IRA.  I entered my 2025 RMD, the exact amount required and TT added 10% additional tax.  Will IRS refund the overpayment or will I have to amend the return to recover TT's error.

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7 Replies

Extra tax on RMD

I PAID TAX ON THE RETIREMENT MONEY ALREADY

You had tax withheld from the distributions from the retirement account, just like when an employer withheld tax from your paychecks.  When you enter it all into the software, the calculations are done to reconcile the amount of income you received and the amount of tax that was withheld.  You might owe more or you might get a refund.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Extra tax on RMD

No tax was withheld from the distribution as I pay quarterly estimated tax. My tax on the distribution is included based on my total income.

DianeW777
Employee Tax Expert

Extra tax on RMD

My advice is to amend your tax return because the IRS is not likely going to refund the money if it appears as though a penalty should exist.  If your return was accepted, allow a little more processing time and then amend just to be safe and know a refund will be coming.

 

Read the information in the link below before you make any changes so that TurboTax will know the original numbers and the corrected numbers for your amendment.

 

If you want to make changes or add a document to a tax return that has already been filed and accepted by the taxing agency, you should follow these guidelines. 

 

  • You must first wait until the initial return is completely processed.
  • You will have to use the same TurboTax account that you used for the original tax return.
  • Once you begin your amendment, you'll see your original return.
  • The refund calculator will start new at $0 and only reflect the changes in the refund or tax due
  • Only make changes to the areas of your return that need to be corrected.
  • You have three years from the date you filed your return or two years after you paid the tax due (whichever is later) to file an amendment

Amend a tax return for the current tax year 

Tax Form Availability  (Form 1040-X will not be ready until later this month - use this link to see when it becomes available.)

 

@Michael180 

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Extra tax on RMD

Thanks, Diane

My return was accepted and I'll be waiting to see what IRS determines.  I tried to amend the return, but TT won't let me take out the erroneous extra tax.

 

A friend of mine had a withholding tax penalty added to his 2024 return, but IRS gave it back to him.  I"m hoping they'll do likewise with mine.  

DawnC
Employee Tax Expert

Extra tax on RMD

You can't amend yet because the Form 1040X is not ready.   If you made any changes to your return, undo those so if you do have to do an amendment, your 1040X will be correct.  

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Extra tax on RMD

Thanks Dawn.  As I stated, I haven't yet tried to amend.  I attempted to revise the form in TT but it wouldn't let me  make the change.  If/when I amend, will the 1040X be available from TT and will it let me change the original, processec return?

 

Your help is much appreciated!

DawnC
Employee Tax Expert

Extra tax on RMD

Yes, if you have to amend, you will be able to do so in TurboTax.   Form 1040X is usually available by mid-March and there is not a fee to amend if you filed your return with TurboTax.  

 

And you will be able to e-file the amendment is you do it before 10/15/2026.

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