Required Minimum distribution

[joel-j-metzger]

If I run my prelimary return without entering 1099-R forms it shows I owe a 25% penalty since I have not taken my RMD. Fair enough. If I enter a 1099-R showing my withdrawal equal to the RMD, it increases the RMD by the amount of my withdrawal. The penalty stays the same. I have tried both entering and not entering my RMD amount in my 1099-R. In either case it increments the RMD.

This does not work.

Any ideas?

[ReneV4]

It appears you may have accidentally triggered Form 5329 that is now in the background, so you will need to delete it, as well as your Form 1099-R entry and then re-enter your Form 1099-R. Here are the steps to follow:

To delete Form 1099-R and Form 5329: 

1. Go to Tax Tools on the left hand panel inside of TurboTax
2. Click on the down arrow and scroll down to Tools
3. Click on Tools and select Delete a form from the menu items that appear in the Tool Center
4. Click on the trash can icon to the right of Form 1099-R, then Form 5329

Next, if one of your 1099-Rs covers your entire RMD, you can use it to satisfy reporting your full RMD as follows:

1. Return to Income, then click the down arrow to the right of Retirement Plans and Social Security
2. Select IRA, 401(k), Pension Plan Withdrawals (1099-R) in the Federal Income section
3. Click on +Add a 1099-R and input the 1099-R from which you took your entire RMD
4. Click Continue as you complete the interview entries
5. "Let's get more information about your Required Minimum Distribution (RMD)", enter the amount of your RMD (no extras) that was due by December 31, 2025, Continue
6. On the next screen, "How much of this distribution applied to your December 31, 2025 RMD?", select, "The entire distribution...", Continue
7. Note: To prevent TurboTax from double-counting your shortfall, only enter the RMD amount specific to this 1099-R. If you have multiple accounts, do not enter your combined total RMD here; the software will aggregate those totals for you later.
8. When you reach, "Review your 1099-R summary, Continue (not the pencil)
9. When you reach, "Let's go over any required minimum distributions (RMD)", Continue (not the pencil)

If one of your Form 1099-R distributions covers all RMDs for 2025, you can enter the full amount of the RMDs (no extras) in the first Form 1099-R distribution above and then skip the second Form 1099-R questions about RMD by entering zero at step 5 above and just Continue through the remaining questions.