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U01rlh00
Level 1

RMD

In 2020 I took my RMD then found out the I did not have to take, so I had the monies put back with the exception of the Federal Tax Withheld which was sent to the IRS.  I was told by Schwab that I would need to get back the Federal Tax withheld, (forwarded by Schwab to the IRS) through the filing of my 2020 tax return.  Where on Turbo Tax to I show the amount Schwab forwarded to the IRS pertaining to this event.

 

Thank You

4 Replies
DanaB27
Expert Alumni

RMD

The taxes withheld will be in box 4 (federal) and box 14 (state) on your 1099-R. When you enter your 1099-R into TurboTax you will enter this information as well. The withheld federal taxes from the 1099-R will show on line 25b on Form 1040.

 

Since you didn't return the full amount, the amount of taxes withheld will still be taxable income. 

 

Please follow these steps to enter your 1099-R and RMD rollover:

  1. Login to your TurboTax Account 
  2. Click on the Search box on the top and type “1099-R”
  3. Click on “Jump to 1099-R”
  4. Continue until "How much was a RMD?" and select "none"
  5. Continue "Tell us if you moved the money through a rollover or conversion" and select "I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days)"
  6. Continue answering the questions and enter the amount actually returned.

 

RMDs were waived for 2020. You must indicate to TurboTax that none of the distribution was RMD. If you already enter the 1099-R as RMD and changing your answer to the RMD question doesn't work then you have to delete and renter the 1099-R form. 

 

 

You can verify your entry by looking at your Form 1040 line 4 or 5:

  1. Click on "Tax Tools" in the left menu
  2. Click "Tools"
  3. Click "View Tax Summary" in the Tool Center window
  4. Click on "Preview my 1040" on the left

 

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U01rlh00
Level 1

RMD

Thank You for your reply, however I have an additional question.  With respect to the 1099-R I received from Schwab the amount recorded in Box 1 & 2 does not reflect the correct amount of distribution.  These 2 boxes represent the total distribution prior to the dollars that were put back into my 401-K account.  This is because the RMD was taken prior to my knowledge that I did not have to take an RMD.  The total dollars put back into my 401-K was the total distribution less taxes submitted by Schwab to the IRS.

I was informed by Schwab the a corrected 1099-R would not be issued but at a later date a form 5498 would be issued to reflect this discrepancy.

On Turbo Tax do I  enter the correct amount in Box  & 2a which would be the amount of the taxes submitted to the IRS?  If I enter the incorrect amount (the amt shown on the 1099-R) my income becomes inflated.

Exactly how do I handle this entry to properly reflect what has happened above.

 

Thank You

 

Robert Hall

AmyC
Expert Alumni

RMD

You took a distribution, had tax withheld and paid, rolled the remainder of the money into your 401k. You will claim only the portion that was returned as a contribution. The taxes are on the 1099R box 4.

 

Let's clarify what you rolled back in. You could have rolled:

  • The full amount minus taxes that you received
  • The full amount by adding personal money from your pocket to cover the taxes paid

Following the steps above, you are entering the 1099-R information, full amount, just as boxes say, and then the rollover information, the actual amount rolled back.

 

Brokerages report your year end value of accounts to the IRS as well as the 5498 they send you both.

 

Keep your copies of what happened in a financial notebook, not with your taxes. This is a long game.  I want to urge you to create a financial notebook that is kept separate from your tax return. Keep it safe and each year, add your year-end statements from all your financial accounts plus a copy of your W2’s, 5498, and 8606, if applicable.

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macuser_22
Level 15

RMD


@U01rlh00 wrote:

Thank You for your reply, however I have an additional question.  With respect to the 1099-R I received from Schwab the amount recorded in Box 1 & 2 does not reflect the correct amount of distribution.  These 2 boxes represent the total distribution prior to the dollars that were put back into my 401-K account.  This is because the RMD was taken prior to my knowledge that I did not have to take an RMD.  The total dollars put back into my 401-K was the total distribution less taxes submitted by Schwab to the IRS.

I was informed by Schwab the a corrected 1099-R would not be issued but at a later date a form 5498 would be issued to reflect this discrepancy.

On Turbo Tax do I  enter the correct amount in Box  & 2a which would be the amount of the taxes submitted to the IRS?  If I enter the incorrect amount (the amt shown on the 1099-R) my income becomes inflated.

Exactly how do I handle this entry to properly reflect what has happened above.

Is the IRA/SEP/SIMPLE box checked on your 1099-R? 

 

If its then this is a Traditional IRA and NOT a 401(k)  - it might have been a 401(k) rollover account when  it was created, but it is an ordinary Traditional IRA now.

 

Any tax withheld in box 4 will be applied to your 2020 taxes paid and will add to your refund.   If you wanted to roll the entire box 1 distribution back to the IRA then you had to replace the amount of tax withheld with other funds.     If you did not do that and and only rolled back the net amount (box 1 minus box 4) then  the amount in box 4 will be a taxable distribution.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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