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 In total I have withdrawn my full RMD but not the full RMD from one of my three IRAs.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?

[wja]

shlaw47, I agree. My problem is what if Turbotax does not come up with a software fix before April 15.  I wanted to have a plan B just in case.

[VolvoGirl]

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@shlaw47 wrote:

The problem with the workarounds:  you are required to swear to your return under penalty of perjury.  TurboTax wants us to swear to figures that do not match the 1099-R, which is also submitted to the Government.

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You are not changing anything on your 1099R.   Your return will still match the 1099R the IRS gets.  You just are answering the Turbo Tax RMD follow up questions to make it come out right so you don't get a penalty for not taking the RMD.  The RMD info is not transmitted with your tax return.  It doesn't show your RMD amount on your tax return or need to break it out.  Your 1099R doesn't show the RMD.  

[wja]

To further comment, form 5329 should not be filed unless you DID NOT receive the RMD.  Because of the software bug in the 2024 issue of TT delux (not aggregating all of qualified distributions) it  automatically generates form 5329  and a schedule 2 form.  This TT problem needs to get fixed quickly.  Please call TT and bring this matter to their attention. 800.624.9066.

[wja]

Sorry - Form 5329 gets submitted with your tax return.

[wja]

There is a bug in the 2024 TT deluxe.  It refuses to aggregate all the qualified plan (s) distributions. Thus, it generates form 5329-T and a schedule 2 penalty tax.  Needs to get fixed pronto.

[dan_in_MI]

Please look at the previous posts. The bug in TT you have discovered is well known to the people who have been posting. You can help by calling Turbo Tax and trying to get their attention. A good method for calling that assigns a ticket before you call is described in several posts.

[dan_in_MI]

You are misinformed. In the event of a penalty- the topic of this entire series of posts, Form 5329 is filed with your tax return. 5329  does include the RMD, and because of the TT bug it is the wrong RMD and wrong RMD distribution. 

Besides that, the government gets a Form 5498 on all IRAs every year with the value of the RMD at the end of the previous year. Clearly they do know your age, and the IRA value, and therefore they can know your required RMD with just a tiny calculation. I think it would be a mistake to say they don't know the RMD amount unless you know what the IRS calculates while checking the return.

[plpollack]

I w/d from 2 IRA's, but more from one and less from the other than needed, but answered the way the TTax bug required to get it done - each matching its RMD requirement.

I've generated the pdf for all Forms required for filing and I DID NOT get a Form 5329 generated.

I then created a separate pdf with all of the Forms and Worksheets dealing with IRA and I STILL did not get a Form 5329 generated.

This tells me that a Form 5329 will not be included in my filing.

Am I right?

[dan_in_MI]

I am not a tax expert so you probably should not trust me.

Having said that...

I think 5329 is only required if you have a penalty or other unusual situation. At any rate, if there are no numbers it in the form makes sense to me that it would not be filed. There is an easier way - You can view the 5329 by going to View>Forms, and scrolling down to the form. Scan through the entire form and you will find lines 52 and 53  that are the ones of interest. If the form has no numbers, seems pretty certain it would not be filed.

[Holintax]

While waiting for TT to come up with a fix, I went back and deleted all of the information I put into my 1099-Rs. I then went to the Forms view to find form 5329. All of the numbers that had been in there were now out. I then manually deleted the 5329 form so it wouldn't get submitted with no information. Don't know if it would have, just trying to be proactive. Just wish TT were proactive.

[Cuz314]

Just FYI, when I clicked in the Help Center in the app I got a "Bad Request" and was redirected to the TT community home page so I couldn't open a ticket. I guess that one way to minimize the problem reporting. 

[wja]

"dan_in_MI," you are correct about form 5329.  It does not get generated in TT UNLESS a penalty tax is imposed.  As I've said before TT (2024 version)  refuses to aggregate multiple distributions from multiple IRA accounts to satisfy  the RMD. Hence, it calculates a penalty tax in form 5329.  This problem is clearly a bug in the 2024 issue of Turbotax.  I spoke with tax agent at Turbotax (2/10/34) and together we reviewed the problem.  I let him have my computer screen access so he would get a clear idea of what I was complaining about.  He agreed with me that there is something wrong in the software calculations. He said he would elevate the issue to the proper team members.  That's all I know at this point: 2/11/24, 5:49pm.  This is a serious problem that TT has to get fixed.

[Pottomania]

You say, "You can answer in TurboTax that you have satisfied all RMD requirements.."

How do I do this?

[dan_in_MI]

Thank You for your effort.

We need lots of people to do the same- call in until we get through.

I will probably have another go at it in the next couple days to see if I can get some traction.

[DelGman]

I just now got off the phone with prouct support.  After some time searching, the young lady informed me that as of 12:45 PM today, TT has begun working on a correction to the issue so clearly discussed here. Allegedly, anyone who has supplied their email address about this will be notified when the issues is resloved.   

Time, as they say, will tell.  G