No, the 5329 is created by TurboTax as part of your 1040 tax return. Why do you think you need to add a letter of explanation to it?
Due to an error on my part, I failed to take all of the RMD from my IRA. I sold the required shares, but deposited the funds back into my retirement account instead of to my non-retirement account. In good faith, I thought I had taken all of the RMD for 2023. I need to submit a letter of explanation to ask for a waiver of penalty from IRS. Do I need mail form 5329 (instead of e-file) when a letter is attached to it?
If you only need to file form 5329 and aren't required to file a full tax return, you can just file form 5329 alone, but this is probably uncommon. For example, if your only income is non-taxable social security, and you need to file form 5329 because you missed your RMD and want to request a waiver, you can file it alone. But if you have other taxable income and need to file anyway, then form 5329 will be part of your finished tax return as an attachment to your form 1040.
I believe you can enter an explanation in Turbotax when you get to that step, although someone else who has used the program for that function might have a better idea of the exact steps. Unfortunately, you can't attach extra documents like PDFs to a Turbotax tax return, that's a programming choice. But some forms do allow a written explanation.
Thank you for your helpful reply. Perhaps my best option is to file my 1040 along with 5329 by mail so that I can attach a letter of explanation. If anyone else has other suggestions, I would appreciate it hearing it.
@rsteves wrote:
Thank you for your helpful reply. Perhaps my best option is to file my 1040 along with 5329 by mail so that I can attach a letter of explanation. If anyone else has other suggestions, I would appreciate it hearing it.
Check first to see if Turbotax allows you to enter an explanation, it does sometimes. (This issue is that if the program does not allow an explanation in a given situation, you can't add one. But this is a common situation so it might allow it.)
@Critter-3 what do you think about the 5329?