topic What is Tax on excess accumulations in retirement account? in Retirement tax questions

What is Tax on excess accumulations in retirement account?

rbaierwa — Wed, 28 Jan 2026 07:10:45 GMT

What is excess accumulations in retirement account?

Re: What is Tax on excess accumulations in retirement account?

DianeW777 — Sat, 25 Jan 2025 17:43:05 GMT

Excess accumulations occur when you have contributed more than you are allowed in a given tax year to your retirement account. The earnings on that excess contribution would accumulate interest. This is what is referred to as 'excess accumulations' in any retirement account.

Excess accumulations can also occur if you have not taken your required minimum distributions (RMD). TurboTax will generate a Form 5329, if this is the case. Once you complete the 1099-R and answer the questions you can preview your return.

For TurboTax Desktop simply switch to Forms. In TurboTax Online/Mobile you can use the instructions below to preview your return.

Using the Tax Tools (left panel):

To find Tools:
- Sign into your TurboTax account and open or continue your return.
- Select Tax Tools in the left menu.
- You'll find Tools beneath Tax Tools.
- Select View Tax Summary
- Select Preview My 1040 (left panel)
  - Check Form 1040, line 23.

@rbaierwa

[Edited: 01/25/2024 | 9:42 AM PST]

Re: What is Tax on excess accumulations in retirement account?

VolvoGirl — Sat, 25 Jan 2025 16:17:24 GMT

It could also be if you got a 1099R for your RMD Distribution and Turbo Tax thinks you didn't take out the full RMD amount. Did you get more than 1 1099R?

Re: What is Tax on excess accumulations in retirement account?

rbaierwa — Sat, 25 Jan 2025 16:23:59 GMT

Thank you so much DianeW777: Excess accumulations occur when you have contributed more than you are allowed in a given tax year to your retirement account. The earnings on that excess contribution would accumulate interest. This is what is referred to as 'excess accumulations' in any retirement account.

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I did not make any contributions to my IRAs in 2024, in fact no contributions to IRAs since 2014 yet Turbo Tax shows tax on excess accumulations for a significant amount. I don't know where they are getting this info from and T. Tax does not offer a way to analyze this and find out where it came from.

Re: What is Tax on excess accumulations in retirement account?

rbaierwa — Sat, 25 Jan 2025 16:30:23 GMT

Thank you Volvo Girl. BTW, I worked for Volvo for 24 years before retiring.

I did get 2 1099-Rs and the amounts on both exceed the MRD for 2024.

Re: What is Tax on excess accumulations in retirement account?

VolvoGirl — Sat, 25 Jan 2025 16:36:27 GMT

But it probably thinks one of the 1099R didn't take enough RMD out. Turbo Tax changed this year. When it asks about the RMD it is only asking for that one 1099R. You need to enter the amount in box 1 on that 1099R for the RMD, not the total RMD for both.

Re: What is Tax on excess accumulations in retirement account?

rbaierwa — Sat, 25 Jan 2025 16:48:03 GMT

Thank you again VolvoGirl.

It is starting to make sense now. Both 1099-Rs are for RMDs and it sounds like TT is considering only one of them as an RMD. I'll have to look at it later as I am getting a bit groggy after 3 hours working on TT and trying to figure this out. Your response certainly helped a great deal and I'll use that info when I get back on and tackle this issue. Thanks so much again.

Re: What is Tax on excess accumulations in retirement account?

rbaierwa — Sun, 26 Jan 2025 15:56:49 GMT

I'm Back VolvoGirl,

I'm a bit confused by your comment: "When it asks about the RMD it is only asking for that one 1099R. You need to enter the amount in box 1 on that 1099R for the RMD, not the total RMD for both."

Here's the way I understand it: Add the amounts from both 1099Rs and enter the total amount as one 1099R on turbo tax. Then when I fill out the total RMD amount when asked, it'll show that I did take out the full RMD plus extra. Hope that make sense and Turbo Tax accepts it. Thanks once again.

Re: What is Tax on excess accumulations in retirement account?

VolvoGirl — Sun, 26 Jan 2025 17:10:33 GMT

I didn't understand what you wrote. I'll ask @dmertz

Re: What is Tax on excess accumulations in retirement account?

rbaierwa — Sun, 26 Jan 2025 17:52:06 GMT

Sorry for that explanation. Here's a better one:

I received two 1099R for my RMDs in 2024. Both total more than the required minimum. Yet when I enter both separately, TT tells me I will be taxed on over $XX,000 for not taking the full RMD. It seems there is a blip in the program and I am trending toward another on-line tax prep service that is much clearer and has fewer headaches and program glitches. I still look forward to any help you can provide and all the time you have given to this question because I would like to stay with TT but not if issues like this continue. Thank you again so much. I look forward to getting this straightened out.

Re: What is Tax on excess accumulations in retirement account?

VolvoGirl — Sun, 26 Jan 2025 17:57:54 GMT

When you enter each 1099R you enter the amount that's on box 1 of that 1099R for the RMD question. Not the total RMD you needed to take. You need to enter the RMD individually. Don't worry that the total of both is more than the actual RMD.