TurboTax Premier 2024 RMD Question

[Faustind]

This is an example and not real figures. I have 4 accounts that each required an RMD for the 2024 tax year. For ACCT #1, I have an RMD = $10,000, but an annual annuity payment to me of $20,000. For ACCT #2, I have an RMD = $9,000. For ACCT #3 + ACCT #4, I have a combined RMD = $10,000. Hence, my Total RMD for 2024 = $29,000. As I get an annual annuity of $20,000 from ACCT #1, they told me I could use $10,000 of that amount toward the RMD total for ACCT #3 + ACCT #4, from which I made no withdrawal in 2024. As I used the first 2 accounts only to cover my Total 2024 RMD, how do I show this in TurboTax Premier 2024? That is, how do I show that $10,000 of ACCT #1 went to pay my RMD for ACCT #3 + ACCT #4? How do I show the RMD for ACCT #3 + ACCT #4 when I do not have any withdrawal from them during 2024?

[RobertB4444]

You can withdraw from only one account if they are both regular IRAs or 403b plans.  If any of them are 401ks or 457 plans or the like then you have to take the required RMD from each account separately.

Make certain that the 'IRA/SEP/Simple' box is checked on all of the 1099Rs that you received and in the TurboTax system.  If it is not then the system will charge you a penalty.  If you did not receive a 1099 from any account then you should not enter that account in TurboTax at all.

Here is where that information can be found on the IRS website.

@Faustind 

[Faustind · Accepted solution]

Thank you so much RobertB444 for your prompt and informative reply. Perhaps I asked my question incorrectly in order to get the response I desired. As I did some more searching later in the day I found the answer I wanted:

ANSWER: An IRA owner must calculate the RMD separately for each IRA that he or she owns, but can withdraw the total amount from one or more of the IRAs. 

 If you are sure that you have satisfied all RMD requirements, then in TurboTax, on each form 1099-R for RMD withdrawals, answer that The entire distribution was an RMD then on the following page, to the question What is the RMD for your account? enter the amount of the distribution from that IRA account.

 By doing this, you are telling TurboTax that all RMDs are satisfied and TurboTax will not calculate any penalty. The information you entered in TurboTax is to enable TurboTax to calculate any penalty where applicable, and is not reported to the IRS.

[Jeannette1]

See below the email I received from my tax expert.

According to the law but there is no law that prohibits it ? What does it mean ? I know how much I should take out in RMDs from several accounts. I did not have to figure out how much for EACH account.

I took my RMDs from 2 Fidelity accounts. At the end TT asks me if I have other accounts (IRA). I do, one with  Vanguard. I was told by my TT expert that I should say no because I had taken all my required distributions from 2 IRA accounts with Fidelity. Am I safe doing that ?

"Based on our conversation today about RMD, I reported the issue to my manager. In response, he explained that the software is designed according to the law, which states that you must withdraw the RMD from each retirement account. However there is not law that prohibits calculating the total RMD from all accounts, adding them and withdrawing them from the accounts of your choice, because of that, the IRS allowed us to do it. Our software is designed to prompt withdrawals from each account, but this is not a strict requirement. For future years, you can simply indicate that you do not have any pending RMS's from any of your accounts, because you know that you opt to take the total from one, two or the accounts of your choice.

I understand that our software can sometimes be challenging to navigate, but we're always working to make it more use-friendly while ensuring compliance with tax laws. After all, taxes are complex, and there will always be challenges along the way."

[DanaB27 · Accepted solution]

If you had multiple IRAs but only took a distribution from one IRA to meet your RMD of all IRAs then please follow the steps below to enter this in TurboTax. Please see Can an account owner just take a RMD from one account for additional information.

Please follow these steps in TurboTax Online:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “1099-R”
3. Click on “Jump to 1099-R” and enter your 1099-R
4. Continue until "How much of the $XXXXX was a RMD?" screen and select "Only part of this distribution was a RMD" and enter the amount of RMD /or select "The entire distribution was an RMD" (if this distribution includes RMD for other IRA accounts then you included the amount here)
5. Enter the RMD amount for this account on the "Let's get more information about your Required Minimum Distribution (RMD)" screen
6. On the "Review your 1099-R info" screen click "Continue"
7. On the "Did You Miss a Required Distribution From Any Retirement Accounts?" screen select "An IRA..."
8. On the "Total RMD for all other IRAs" screen enter the RMD from your other IRAs (where you didn't take a distribution from).

In TurboTax Desktop:

1. Click on "Search" on the top right and type “1099-R”
2. Click on “Jump to 1099-R” and enter your 1099-R
3. On the "Required Minimum Distribution" screen enter RMD for this account 
4. On the "How much of This Distribution Applied to your December 31, 2024 RMD" select "Some of this distribution…" and enter the RMD amount / or select "The entire distribution applied…"  (if this distribution includes RMD for other IRA accounts then you included the amount here)
5. On the "Your 1099-R Entries" screen click "Continue"
6. On the "Did You Miss a Required Distribution From Any Retirement Accounts?" screen select "An IRA..."
7. On the "Total RMD for all other IRAs" screen enter the RMD from your other IRAs (where you didn't take a distribution from).

@Jeannette1