Reportiing a redeposit of part of an RMD

[barryberkov]

It withdrew more than I needed to for my 2019 RMD and was within the time frame to correct the amount by putting the extra amount back into my SEP-IRA.   My 1099R shows the full amount and the redeposit transaction is described as IRA Rollover Contribution.   Where and how do I report the amount so I don't ahve to pay tax on it?

I've tentatively put the amount on line 1a (less amounts rolled over) of the Form 1099R  Summary but had to use "override" to do that.  Is that the appopriate way to deal with what would be a reduction in the total RMD distribution?   

Thanks in advance for any help.

BFB

[dmertz]

No, using an override is inappropriate and unnecessary.  You need to remove that override, then simply enter the Form 1099-R as received, indicate that part of the distribution was RMD, indicate the amount that was RMD, then indicate that you moved the money to another retirement account (or returned it to the same account), indicate that you rolled over part of the money, then indicate the amount rolled over.  TurboTax will include the entire gross amount on Form 1040 line 4a but will exclude from line 4b the amount rolled over.  TurboTax will also include the word ROLLOVER next to line 4b.

[KathrynG3]

No, do not change the issued Form 1099-R. Begin by entering Form 1099-R exactly as you received it as @dmertz described.

{Edited 2/24/2020 | 3:31 PM PST]

@barryberkov  

[barryberkov]

Thank you for the reply but the answer doesn't solve my problem.

I entered the 1099 exactly as received and made no modifications to it.  It includes the amount distributed that was subsequently put back in the IRA and the brokerage transaction was described as  a rollover contribution.

I made QCDs and these were handled by Step by Step and my 1040 shows a lower taxable amount marked QCD reflecting the sum of the QCD amounts.

What I don't know how to do is adjust my taxable income down for the rollover amount   That amount is included in the total of the RMDs which is the sum of the distribution amounts on the 1099R forms.  I could not find a place to make an entry other than on the 1099R Summary but making the entry requires using an override for line 1a on Form 1099-R Summary.   Doing so seems to result in the tax calculation being appropriate modified but I cannot find where the amount is used. 

The bottom line is that if using the override isn't correct, where do I enter the amount by which which my taxable income needs to be reduced.   BTW, the brokerage firm says they ulitmately will send me some kind of report about the rollover amount but since I don't need the form to file my taxes, I won't get it until May.   

[dmertz]

If you can't do this without overrides, either you are not entering it correctly or your rollover included some  amount of your RMD which was not eligible for rollover.  A permissible rollover entered properly combined with a QCD will result in TurboTax including the notation "STMT" next to Form 1040 line 4b and will include a statement showing the QCD and rollover amounts separately identified.

Try deleting and reentering the Form 1099-R.

[barryberkov]

None of the replies I received were totally correct was partially correct.   It is never appropriate to modify a 1099-R and there is no place on it to indicate a redeposit.   After spending 45 mnutes on the phone with a Turbotax "tax expert," I received an incorrect answer.   Subsequent conversations with the brokerage firm and the IRS (amazingly, I did get through to them on the phone) and then another call to Turbotax provided the correct answer.   The only way in Turbotax to report the rollover and have it appear on the 1099-R summary without using an override is to enter the 1099-R information via Step-By-Step.  Incidentally, using an override will put the amount in the right place but you won't be able to file electronically.  

BFB

[JRJ9]

This is going to be a big issue for 2020 since many persons took their RMD before regulations allowed them to reverse part of the original RMD.  We still want to be able to file online, so this seems to be an issue with the question in 2019.  Good instructions need to be given by TurboTax so we handle it properly when using the software.

[VolvoGirl]

What issue?  Turbo Tax handles that. 

Since there is no RMD required for 2020,  after you enter the 1099R say it was NOT an RMD and then that you rolled it over (even if back into the same account).  Was any withholding taken out?  If it was then did you replace the withholding with your own money?  Otherwise the withholding will be a taxable distribution itself.

[macuser_22]

@JRJ9 This question is about 2019 and has nothing to do with the 2020 COVID-19 related return of RMD that TurboTax will do correctly when you enter the 1099-R and answer the RMD question by checking the box that "this distribution was NOT an RMD" because for 2020 it was not.

[JRJ9]

I entered the question under the 2019 post because I did not see a reference to 2020.  Question in 2019 stated they were not able to file online after making changes.  At the time of my 2020 distribution in January, RMD regulations were in effect.   In August, I replaced part of the distribution, including the tax, back into the same IRA as a "IRA rollover contribution".  I will get my previously paid tax back when I file my return.  My 1099-R shows the original gross distribution.  I assume I will put the  rollover in a separate field.  The POINT of the question, will I be able to file online as the user question for 2019 had an issue with this.

[macuser_22]

Yes you can e-file with a rollover.   This is handled the same as any other rollover.    TurboTax has no way of knowing if this is a returned RMD or not.   That is not a question in TurboTax.    As I said, just do not indicate that it was a RMD.      RMD's are not allowed to be rolled over but there were no RMD's in 2020 so it was not a RMD.

[macuser_22]

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@JRJ9 wrote:

I entered the question under the 2019 post because I did not see a reference to 2020.  Question in 2019 stated they were not able to file online after making changes. 

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That was the posters error in how they entered it.  There was no problem in 2019 or e-filing a rollover either.   The poster (for whatever reason) tried to override an entry to change the amount.  You can NOT e-file with over-rides, but there was no reason to ever override anything to properly report this - the interview handles this properly without any overrides.

[barryberkov]

I was the person who posted re 2019 and I was eventually able to file electronically.  The point was to avoid having an override and it took talking to the IRS and a second conversation with a TurboTax support person to figure out what to do.   It's best to go through the step-by-step dialog.  The 1099 reports the full amount and the amount that was put back is treated as a roll-over back to the same IRA.   You can adjust down the taxable portion manually but either way, it's best to include a statement explaining how the taxable portion of the IRA distribution was calculated.   In my case, the taxable amount was the amount shown on the 1099 less qualified charitbable donatons and less the rollover amount.    This would appy to 2020 and presumably any tax year.

[macuser_22]

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@barryberkov wrote:

   It's best to go through the step-by-step dialog. 

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Not only is is it "best" - it is the ONLY supported way.    Using the forms mode to enter data voids the TurboTax accuracy guarantee because the forms mode depends on *you* to know exactally what you are doing and to properly link associated forms and do your own error checking - all of which is done for you in the interview mode.  The forms mode is intended for error checking and to see what is actually on various forms.  

[barryberkov]

It may be the "best" way,  but even using it, I could not find any trail of what it did other than to get the right figure into the taxable amount line without using an override.   That is why  I feel it's important to include information in a statement.  If someone gets audited, I don't know of a way to show what was entered into the step-by-step process once the return is filed.