Yes, you will need Turbo Tax Deluxe or higher to file Form 5329. The form is automatically generated in your return if certain events are reported in your return that require a 5329. Typically these might be:
- Early Distribution Penalties:
If you took an early withdrawal from an IRA, 401(k), or other retirement account before reaching age 59½, you may be subject to a 10% early withdrawal penalty. Form 5329 helps you report and calculate this penalty.
- Required Minimum Distributions (RMDs):
If you reached age 73 (or 72 if you turned 72 before January 1, 2023) and did not take your required minimum distribution (RMD) from your retirement account, you may face a penalty.
- Excess Contributions:
If you made excess contributions to an IRA, 401(k), or other retirement account, Form 5329 is used to report and calculate the penalties. The IRS imposes a 6% penalty on the excess contributions for each year they remain in the account.
- Excess Accumulation:
This applies to accounts like IRAs. If there are excess funds that remain in an account past the required time and you don't take your RMD, Form 5329 would be used to report the penalty.
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