I have multiple IRAs. In total I have withdrawn my full RMD but not the full RMD from one of my three IRAs. Why is TurboTax calculating a penalty?

[detwilerfam0]

SAME ISSUE HERE - When, oh when, will turbotax fix this?

[dan_in_MI]

Turbo Tax did an update for the desktop product on 2/19/25 that fixes the RMD section. Assuming you are asking about the issue that RMDs are not properly aggregated, everyone that has responded thinks their issue is fixed. Mine was certainly fixed.

So do an update and reenter your data and see if it works correctly.

TT is still not real clear on what you enter into the boxes.

1)When it asks that the RMD is for this account, you need to enter the amount of RMD for this one account. Your plan administrator is supposed to tell you this number, but it is easy to figure out on your own.

2)When it asks how much of this distribution is for RMD, you should put in the amount that you took from this account that applies to your total RMD requirement, even if less than or more than this account's RMD requirement, and include any amount you took from this account to satisfy another account RMD required.

3)if you have Trad. IRAs that did not have a 1099r, you will also need to enter the RMD required for all of those after you have completed the 1099r entries.

It is a bit odd that they have two mindsets for the two questions, but I think it comes about from the IRS direction that the RMD be calculated for each account by the plan administrator, while the withdrawal can be taken from any account as long as the total withdrawal is at least equal to the total RMD required for all accounts. It does seem like TT should be more clear, but at least it works now.

[ar10navt]

I applied  the update. TurboTax calculated the total RMD withdrawal correctly. When I did this before the update I got a form 5329 with a $300 penalty. After the update I did not get a penalty but received a form 5329t with no penalty. So I assume this is correct. Like I said in an earlier post the1040sr, and the 1099 worksheets show the correct amount for the required RMD. 

So I am going to file and see what happens. Does anyone know if form 5329T is transmitted to the IRS ? I don't see it when I print the forms needed for filing if you did not e-file.

[DanaB27]

The RMD section has been updated please go back to your 1099-R entry and review the follow-up questions. At the end of the interview you should be able to select that you took all of your RMD.

Please follow these steps in TurboTax Online:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “1099-R”
3. Click on “Jump to 1099-R” and enter your 1099-R
4. Continue until "How much of the $XXXXX was a RMD?" screen and select "Only part of this distribution was a RMD" and enter the amount of RMD /or select "The entire distribution was an RMD"  (if this distribution includes RMD for other IRA accounts then you included the amount here)
5. Enter the RMD amount for this account on the "Let's get more information about your Required Minimum Distribution (RMD)" screen
6. On the "Review your 1099-R info" screen click "Continue"
7. On the "Did You Miss a Required Distribution From Any Retirement Accounts?" screen select "None of these plans failed to withdraw the RMD"

In TurboTax Desktop:

1. Click on "Search" on the top right and type “1099-R”
2. Click on “Jump to 1099-R” and enter your 1099-R
3. On the "Required Minimum Distribution" screen enter RMD for this account 
4. On the "How much of This Distribution Applied to your December 31, 2024 RMD" select "Some of this distribution…" and enter the RMD amount / or select "The entire distribution applied…" (if this distribution includes RMD for other IRA accounts then you included the amount here)
5. On the "Your 1099-R Entries" screen click "Continue"
6. On the "Did You Miss a Required Distribution From Any Retirement Accounts?" screen select "None of these plans failed to withdraw the RMD"

@detwilerfam0 

[Taxesusernamejohn]

I just restarted TT and it claims my software is up to date.  I still have the problem.

[dan_in_MI]

Perhaps you could describe your problem. Someone may be able to help with a  description.

[ar10navt]

The 5329t wants me to fill out a 1099r for an account I took nothing out of. That is it for me.  Tomorrow I get H &R Block ,if that does not work I'll go to tax person, I know a good one. For 7 years I have entered processed IRA's like this with no problem in turbotax . Good bye

[Taxesusernamejohn]

The problem is described in some detail starting with the first post on this thread.  It has been going on for a very long time.  I don't want to repeat other people's posts.  The most recent post says that TT  was fixed by an update a few days ago, but my TT Premier reports that it is up to date.

[fanfare]

@ar10navt 

if 5329 is blank everywhere it will not be e-Filed.

assuming TurboTax works correctly.

if 5329 is blank everywhere it cannot impact your tax return.

[ar10navt]

In reference to number 3 in your reply,, are you saying that you should enter a 1099r for an IRA that you did not withdraw any funds from even though you did not get a 1099r for this IRA ?. Where is that entered ?? With the other IRAa for witch you did get a 1099 ??. 

[BACHARACH0]

Step 2 This contradicts the Note Turbotax includes for the relevant screen

Step 3 Where do you enter the RMD for IRAs for which there was no distribution (there is no 1099)?

[Taxesusernamejohn]

The problem is with the input to TT related to IRA withdrawals.  It's OK if there is only one IRA account, but with multiple accounts or in my case multiple assets within an IRA, each one lists the  amount withdrawn and requires input of the RMD, so there are multiple RMD amounts that have to be provided.  There can only be one RMD based on the combined total value of all the IRA's.  As long as the total of the withdrawals exceeds the total RMD there is no penalty.  So, what number do you enter in the multiple boxes for RMD?  TT does not correctly handle this situation and computes a penalty even though the numbers meet the RMD requirement.  I can fix it in my situation because there are multiple withdrawals from different assets within a single IRA.  The company that holds my IRA downloads each asset separately.  I can manually combine the amounts into a single entry.

[dan_in_MI]

The RMD penalty calculation must know the total amount of your required RMD. TT gathers this information by asking you the required RMD for each account that has a 1099r. However, if you have an account that didn't have a 1099r then you will need to disclose that RMD amount. I didn't have to do this, so please see the detailed post back a couple messages on how you get to that question from Dana

DanaB27

Employee Tax Expert

DanaB27

Employee Tax Expert

[dan_in_MI]

Please look at the post from Dana Employee Tax expert a couple messages back. This should answer both of your questions.

DanaB27

Employee Tax Expert

With regard to your questions:

Comment regarding my step 2)I saw no note giving any clear direction on what to include as being included when they ask about "How much of this distribution was for your RMD" (paraphrased). Perhaps you have a different edition. I have Windows desktop. However, in Dana's post it is made clear to include all distributions that you took out of this account to satisfy an RMD.

Comments regarding my step 3 for IRAs without a 1099r) See Dana's post. Where it says to say no to the last question if you don't have any other IRAs, you would say "Yes" I didn't have to do this so I don't know what comes next.

Good Luck!

[dan_in_MI]

I wish I could help you, but I don't think I am qualified to answer your question. I suggest you call Turbo Tax help and let them help you walk through it. That way any remaining issues with their software will also be detected.

They have been very helpful and patient when I called them. There is a suggested method in some of the past posts for how to get a ticket number even before you call. It has worked well for many.

I have multiple 1099rs with non coordinated RMD distributions from multiple accounts. For sure, the issue of computing an unwarranted penalty has been fixed in my case for a Windows desktop TT deluxe Federal + State

Good Luck!