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 In total I have withdrawn my full RMD but not the full RMD from one of my three IRAs.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

[dmertz]

It works if you did no rollovers.  If you have properly satisfied all RMDs, the only aim is to prevent TurboTax from preparing Form 5329 Part IX.  Unless you failed to satisfy an RMD, you should be entering no more than the box-1 amount, otherwise TurboTax will misbehave.

[dan_in_MI]

If the conditions go with the advice it would be more accurate.

I believe there are amounts in Box 1 which must be reported as not RMDs. Therefore using Box 1 as the RMD amount is not good general advice.

Examples

-Distributions that should be untaxed

-Roth Conversions that are required to be on  a form 8606,(I think)

-not paying penalties that are justified because they don't understand what they are doing

-probably others.

I think better advice is to tell people to wait until the software is fixed to file their return.

Alternately, if you need to file before that, then request an extension instead.

By entering incorrect data, filers are not protected by Turbo Tax's warranty, they are certifying that something is correct when they know it is not, and they run the risk of paying more or less tax than they should, putting them at risk of IRS hell.

[wja]

Frankly I'm sick and tired of all this back-and-forth about work arounds, try this try that and hopefully they're working on it,  etc,etc,etc.  TurboTax should have issued a bulletin stating they were AWARE of the issue and have provided a date as to WHEN they expected ti issue a fix.

IF I DON'T RECEIVE NOTIFICATION OF A AN OFFICIAL FIX BY END OF FEBRUARY I AM DUMPING TT AND PURCHASING ANOTHER TAX PREPARATION PROGRAM.

WOW - SO MUCH FOR QUALITY CONTROL AND CUSTOMER RELATIONS AT INTUIT.

[ar10navt]

You bring up some valid points. When I worked in systems and software 18 years ago, you did not put on a fix ,patch, new module, without an IMMEDIATE!!! backout to a version of the software that did not have the error. The was no "four week waiting period"  of working on a fix while users were still having the problem

Of course most of my knowledge was in mainframes,, I am sure thing work differently now.

[dmertz]

The changes to TurboTax were forced by a change to the tax code and corresponding changes to Form 5329, so there is no option for Intuit to "back out" the changes to TurboTax.  The only options for users are to make entries that accommodate TurboTax's current behavior in order to produce the necessary result on the tax return, wait for TurboTax to be changed to make it more clear how to make the necessary entries, or use a different product.

It's clear that the TurboTax developers produced the current implementation without having any understanding the problem they were needing to solve (unfortunately, rather common with respect to the retirement section of TurboTax), but there is no going back.

[wja]

Hello dmertz. 1st, are you a programmer developing and writing code at TurboTax?  If not where did you get this information? 

wja

[dmertz]

I follow the changes made to the relevant sections of the tax code by Congress and the changes made to Form 5329 by the IRS.  History shows that TurboTax is not permitted to release forms for filing until they conform to the IRS forms and instructions, in this case Form 5329.

[wja]

dmertz, let me say this: In my case, I can't speak to form 5329 because it  simply does not apply to me. Beyond that there is still an existing issue with the RMD in the current release which needs to be fixed.  Many others have commented on this and I personally have had an in depth conversation with a TurboTax  employee who reviewed  my return in real time while having access to my computer screen so he could see my return in real time.  As said, I have grown tired of all the excuses for TT.  They need to issue communications with their customers experiencing the problem at hand.  Then FIX the problem.

[wja]

As a PS to my last post, a poster said: " History shows that TurboTax is not permitted to release forms for filing until they conform to the IRS forms and instructions, in this case Form 5329."  Personally I am not interested in TT history.  I simply want the problem fixed period.

[ar10navt]

Have you received any nonfiction about this problem being fixed? 

[dan_in_MI]

I signed up for notifications for this issue.

Crickets.

[John_Bissell]

I received a new update this morning. It looks like the RMD questions have been changed somewhat. I've not had time to change my RMD info for my two IRAs.

[John_Bissell]

I just entered the data for each of my two IRAs, using the amounts that each of the custodians of the accounts said was the RMD for that account, rather than what I actually took out as stated on their 1099-R. TT determined that I had met the full RMD, which was not the case previously. It also had a couple of new screens asking for additional info and whether I had taken the full amount.

It looks like this problem has been fixed but, as always, YMMV for your situation.

[ar10navt]

The updates appeared to have worked. I no longer see the $300 penalty. Will check more closely later.

thanks for your  update on this problem. 

[Puli3339]

Hi, All,

I just have the latest TurboTax Deluxe update, and the "Total IRA distributions and total RMDs" issue appears to have been fixed.

What a relief.