RMDs

[AlB1944]

In 2017 I inadvertently failed to take our RMD's out, but was planning keeping the funds invested as a taxable investment.  I did figure our RMD amounts and paid taxes on the them in 2017.

In 2018 my advisor suggested that we take the 2017 & 2018 RMD's out of the IRA's and place them in a taxable investment.  This was accomplished, but is also generated a 1099-R on the entire amount.

Question is how do I indicate that I already paid the 2017 tax portion?

[VolvoGirl]

How did you pay the tax on your 2017 return without a 1099R? @dmertz  

[AlB1944]

I entered it on line 21 as other income

[VolvoGirl]

I think you need to amend your 2017 return and take it off of line 21.  And fill out the form to pay the penalty for not taking the RMD.   I don't know the form # or how that works or how to enter it in Turbo Tax.  The person I paged above will know so wait for him.

Was 2017 the first year you were suppose to take the RMD?  When did you turn 70 1/2 and your spouse?  The plan should have sent you a letter at the beginning of 2017 saying how much to take.

[dmertz]

VolvoGirl is entirely correct.

I'm not sure because you mentioned only one Form 1099-R, but it appears from the first part of your question that both you and your spouse missed taking RMDs in 2017.  Your 2017 tax return should not have included the missed 2017 RMDs as income; they are includible on your 2018 tax return along with the 2018 RMDs by reporting the entire Form 1099-R amount on your 2018 tax return.  You'll need to amend your 2017 tax return to remove this income, and, if not already done and each of you was required to take the 2017 RMD by the end of 2017, file Form 5329 Part IX for each of you requesting a waiver of the 50% excess accumulation penalty on the late-taken RMD.  See Waiver of tax in the instructions for Part IX of Form 5329:

https://www.irs.gov/pub/irs-pdf/i5329.pdf

However, if 2017 was the first RMD year for either of you because that person reached age 70½ in 2017, things are a bit different for that person since the deadline for taking that RMD was April 1, 2018.  If that person took the RMD between January 1, 2018 and April 1, 2018 the RMD was not taken late and that person does not need to file any Form 5329.  If that person took the 2017 RMD late, after April 1, 2018, the request for waiver of the 50% excess accumulation penalty must be made on 2018 Form 5329 filed with the 2018 tax return, not with the 2017 tax return.