topic Re: Turbotax Premier RMDs handled wrong in Retirement tax questions

Turbotax Premier RMDs handled wrong

Jimbert — Sun, 16 Feb 2025 02:18:31 GMT

I have 2 RMD issues.

1. TurboTax does not sum all IRA distributions to see if the total RMD was met. It handles each IRA separately and that causes an unnecessary tax penalty to be applied to an IRA that did not meet its RMD. In this case, I had distributions from the IRA that caused the penalty, but it was not enough to satisfy that IRA RMD. Enough was taken out of the other IRAs to cover the "missing" RMD amount, so there should not have been a penalty.

2. TurboTax does not let me enter 1099-R data for an IRA that I did not take ANY distributions from. It needs to be entered because it should contribute to the total RMD requirement. Like issue 1, its RMD would be taken care of by other IRA distributions.

Re: Turbotax Premier RMDs handled wrong

fanfare — Sun, 16 Feb 2025 04:23:56 GMT

"It needs to be entered because it should contribute to the total RMD requirement. "

Nothing on 1099-R will allow TurboTax to compute RMD, which it does not do.

HINT HINT: TurboTax goes by the RMD value you tell it.

OR wait for future updates that are supposed to make the interview smarter.

@Jimbert

Re: Turbotax Premier RMDs handled wrong

VolvoGirl — Sun, 16 Feb 2025 06:12:29 GMT

You got a 1099R for an IRA you didn’t take a distribution from? Why did you get a 1099R? You only have 1 RMD for all your IRA accounts.

Turbo Tax changed this year. When it asks about the RMD it is only asking for that one 1099R you are entering. On each 1099R you need to say Yes it was the RMD and only enter the amount from box 1 on that single 1099R for the RMD, not the total RMD for all and even if it is more or less than the total.

Re: Turbotax Premier RMDs handled wrong

Jimbert — Sun, 16 Feb 2025 16:06:55 GMT

Okay no, I didn't get a 1099-R for those accounts. Sorry, I misspoke. I should have said forms 5498 which list RMDs required for the next year. I guess that's the main issue here - TurboTax does not ask about forms 5498 and I am unable to even open up a 5498 form.

I had been telling TurboTax that all of an IRAs distributions were for the RMD but then I thought maybe the problem was that the excess was not able to roll over to other IRAs. So I entered that only a part of the distribution, the required amount, was for that RMD, hoping that the excess would be applied to other accounts. Well, that didn't work either.

I haven't found a way to convince TurboTax that I don't have a penalty. I am unable to override the penalty by entering 0s in the 5329-T form or even by deleting the form. So TurboTax is basically worthless to me now and I wasted my money on it.

Re: Turbotax Premier RMDs handled wrong

fanfare — Sun, 16 Feb 2025 16:42:18 GMT

To address you issue, refer to the comment by @VolvoGirl above.

@Jimbert

Re: Turbotax Premier RMDs handled wrong

Jimbert — Sun, 16 Feb 2025 21:36:03 GMT

I ended up just lying to TurboTax about what the required RMD was by giving it a value lower than the actual required amount. That makes it happy. It won't matter because there are no forms to fill out to tell the IRS what each RMD is supposed to be. They have to look at each of the previous year's forms 5498 and add them up to find the total RMD. TurboTax should not even be asking about RMDs. The federal forms don't.

Re: Turbotax Premier RMDs handled wrong

Jimbert — Mon, 03 Mar 2025 20:10:25 GMT

The latest version of TurboTax has fixed this issue.