Entering RMD for each 1099R

If you are age 72 or older then any pension or annuity that you receive is an RMD.

Well, that seems to be one interpretation, which makes sense to me because, by default, they pay you a fixed amount, which I assume has to be at least the minimum amount, but all the financial institutions that I talked to today say it's not an RMD.

But, anyway, I'm just going to say yes to all because it seems Turbotax won't let me say yes to some and no to others anyway!

Thanks.

different type of plans, different RMD starting dates.  FROM AARP

What type of retirement accounts require RMDs?
Traditional IRAs
Simplified Employee Pension (SEP) IRAs
Savings Incentive Match Plan for Employees (SIMPLE) IRAs
401(k)s
Nonprofit 403(b) plans
Government 457 plans
Profit-sharing plans
Other defined contribution plans

IRS PUBLICATIONS

RMDs from employer plans (other than SEP-IRA for self-employed, SEP-IRA for employees and SIMPLE IRAs) generally must begin by April 1 of the year following the year the individual reaches age 72 or later if the plan provides that employees working past this age can start when they retire. this special rule doe not apply to more-than-5% owners 

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a distribution that is not an RMD can not be used to satisfy say an IRA RMD requirement for the year. Any missed RMD amount can be subject to a 50% penalty)

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 You cannot take the RMD for one type of account from a different type of account. You cannot take an employer plan RMD from an IRA or vice versa. An RMD must be taken from each employer plan that you might have. If you have two 401(k)s and a 403(b), you must take 3 separate distributions – one from each 401(k) and one from the 403(b). There is an exception for 403(b) plans. If you have more than one 403(b), you can calculate each RMD and then combine them and take them from any 403(b) account you have.

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annuities  - a different animal unless held inside an IRA

see this link about RMD's for annuities

https://www.annuityexpertadvice.com/annuity-rmd/#:~:text=No%2C%20non-qualified%20annuities%20are%20not%20subject%20to%20Required,non-qualified%20annuities%20may%20be%20subject%20to%20income%20taxes. 

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saying yes that a distribution is an RMD when it isn't would probably allow you to improperly avoid the 50% penalty for failure to take an RMD.  I can not explain the answer you got unless what they were saying was it was not an RMD for IRA RMD purposes. 

for pensions your payout is to be considered RMD for purposes of TurboTax questions, which are confusing.

a pension is not an IRA.

for IRAs, you have to add the value of all accounts that are Traditional IRAs and calculate the RMD on that amount.

a 401k is not an IRA.

you have a separate RMD on each 401k account that belongs to you.

@rosm2004 

Fanfare,

Thank you for the simple explanation that a 401K is not an IRA. I think that means that the RMD from my thrift savings plan and my IRA are separate and distributions over the RMD from one cannot go towards the RMD of the other. Is that correct?

However, my question was also about Turbotax functionality. However I answer the question asking whether the distribution was an RMD for one 1099R, it applies to all the other 1099R's as well. So, it seems I have to answer YES to all, even though some aren't.

Thank you for the detailed explanation, Mike. 

This is so confusing, which is probably why I'm getting so much conflicting advice from each of the account advisers I've been talking to. Of course, they all caveat their advise by saying they aren't a tax specialist. 

I'm just going to play itself by taking the RMD on any account where I have one and answering YES to the question about whether or not it's an RMD (can't answer NO anyway because Turbotax sets the answer to NO for all accounts).

for traditional IRAs, as long as the amount distributed in any way is at least the RMD for your IRA(s) total.

it doesn't matter how you answer the question.

TurboTax just want to check that you did not rollover an RMD; that is not allowed;

--

each 401k is treated individually.

@rosm2004 

I HAVE NOT EXPERIENCED THIS ISSUE WITH BLANKET CHARACTERIZATION OF ACCOUNTS SUBJECT TO RMD AS AN ACROSS THE BOARD FINDING.  NOT SURE HOW THIS HAPPENS TO YOU OR WHAT MAY HAVE PROPMPTED IT, BUT YOU CAN OVERRIDE WHATEVER NUMBER TURBO MIGHT SUGGEST (IF THEY EVEN DO SUGGEST ONE)

JUST SAY YES FOR ALL, BUT DO YOUR OWN CALC FOR RMD.  YOU'LL NEED TWO BITS OF INFO...TOTAL VALUE OF ALL IRA ACCOUNTS IN YOUR NAME AS OF 12/31/2021 (FOR TAX YEAR 2022) , AND THE NUMBERS OF YEARS OF YOUR LIFE EXPECTANCY (LE) , FROM THE IRS TAX TABLE FOR RMD.  DIVIDING THE AGGREGATE AMOUNT OF IRA ACCOUNTS BY THAT NUMBER FROM LIFE EXPECTANCY TABLE WILL YIELD YOUR RMD

TURBO TAX ASSUMES ALL 1099-R INCOME IS SUBJECT TO RMD, EVEN ANNUITIES OUTSIDE OF QUALIFIED PLANS, SO YOU HAVE TO BE A BIT MORE ON THE BALL.  THE CALCULATION IS ANNUAL, AND SINCE YOUR LE CHANGES AND LIKELY YOUR ACCOUNT BALANCES AS WELL, YOUR RMD WILL CHANGE ANNUALLY.

Not entirely accurate.. Accounts that contribute to the aggregate amount of assets subject to RMD include the following: (copies straight from the IRS pub)

• raditional IRAs
• SEP IRAs
• SIMPLE IRAs
• 401(k) plans
• 403(b) plans
• 457(b) plans
• profit sharing plans
• other defined contribution plans
• Roth IRA beneficiaries

these are each considered defined contribution plans.

What is NOT included are pensions (defined benefit plans).  What also is not included are annuities fund with after-tax dollars (non-qualified). 

@JBERNARDM Please note this IRS website Q&A - https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs

Q15. How are RMDs determined in a Defined Benefit Plan? (updated March 14, 2023)

A defined benefit plan generally must make RMDs by distributing the participant's entire interest in periodic annuity payments as calculated by the plan's formula for:

• the participant's life,
• the joint lives of the participant and beneficiary, or
• a "period certain" (see Treas. Reg. §1.401(a)(9)-6, A-3).

Be very careful.  Check with the financial institution and see if you met RMD for each plan.  If you did not and the IRS catches it the penalty is 50% of what the RMD was.  When you are at retirement age, it is smart to have RMD automatically deducted each year.  If for example, your RMD is $5000, the penalty for missing it would be $2500.  

Contact your financial institution.  If you did not meet the requirement get it taken care of now.  File a form 5329 and ask for forgiveness of the penalty.  The IRS may waive all or part of the penalty.  Computers are catching more and more things like this.  Don't let it slide.  Get it resolved.

Yes, thank you. My advisor on the IRA, whom I had just talked to a few weeks ago, had told me about this year's RMD but failed to advise of last year's and I missed the April 1 deadline. Once I found out, completely by accident because I had called to ask about another issue, I made the RMD withdrawal.  Turbotax does actually ask a question to report this situation and automatically provides the waiver form, which is nice.

However, I did receive a distribution from my employee Thrift Savings Plan distributed that was greater than the RMD for that plan. Now, I can't figure out whether the additional amount counts towards the RMD for the IRA account. I don't think it matters at this point because I have now withdrawn the RMD for both accounts, but it's very confusing because I don't know if the RMDs from the TSP and IRA can be combined - and the phone rep for the TSP was absolutely useless - she not only was unable to tell me my 2022 RMD (she actually told me I should have called her before the end of last year), but she also gave me the WRONG RMD for 2023 (I later found a written letter among my papers stating the 2023 RMD but couldn't find the same letter for 2022) - it was off by thousands of dollars! I haven't been able to get to my TSP on line because they required me to make a new sign on - and to do that I had to request a PIN, which they send in the mail, not email. I didn't get to it immediately when I received it and when I tried again a few weeks' later they told me the PIN had expired! 🙄 Oh well, if these are the worst of my problems (and I hope they remain the worst), I'm doing all right.

For each 401k (if you have more than one) the RMD must be calculated for and taken from that account.

For IRAs, add the total value of all accounts (Traditional, SIMPLE, SEP), the RMD can be taken from any one account or account(s) as you wish.

If your traditional IRA is an individual retirement annuity,
special rules apply to figuring the required minimum distribution.

for a pension , TurboTax asks the confusing question. Answer YES.

@rosm2004 

For tax year N, the RMD is calculated based on the previous year's Dec 31 value

You cannot combine plans to make RMD.  Each plan is stand alone.  I am so happy that you have taken care of this and that TurboTax has prepared the form.  I did not know that would happen and thought you would have to do that manually.

Yes, I know the RMD is based on the previous year's account value, i.e., 2022 RMD is based on the December 31, 2021. But the rep couldn't tell me what it was! I did later find the December 2021 statement and was able to calculate the RMD, but the RMD was not on that statement, or any other piece of paper I had for 2022. 

I guess the thrift savings plan is a kind of 401(k). I don't have another 401(k) but have an IRA (the one for which I did not take a distribution and should have). 

Turbotax asks the following question:

Enter the total RMD and the amount you actually receive. Combine the amounts for all IRAs and qualified employer plans you owned and enter the totals below.

Required RMD Amount ___________

Actual Amount Received ________

I only got this question once, after I had entered all my 1099Rs. Only one of the 1099Rs had an RMD (I did not have an 1099R for the IRA because I didn't withdraw anything that year.)

So, I don't know if I'm supposed to include the RMD from the IRA in the total amount, or only for the TSP, for which I have a 1099R. I

Thanks for your help. 

But I think I'm going to have to call the IRS because if I have to consider each one separately, I have no idea how to answer the question that I posted in my previous reply. Then the waiver form asks to specify the amount I want waived from the amount entered on that question. 

to calculate the RMD for 2022 

you need your age on your birthday in 2022 to get your divisor

and your Dec 31 balance (total).

I don't know how to explain it any more clearly.

See IRS Publication 590 B for the full scoop.

If you missed the RMD enter the RMD on 2022 Form 5329 and request a waiver of penalty.

You will probably get it.

There is a penalty when the amount you removed is less then the RMD.

the penalty is on RMD - amount. That's why TurboTax asks for the numbers.

if amount is zero the penalty is 50% of RMD.

@rosm2004 

I called the IRS and was surprised to get through almost immediately. The first agent couldn't answer my question and put me through to the legal team where I was put on hold for just a few minutes. I got the answer that some of you already stated - the RMD from the TSP (similar to a 401k) cannot be combined with the RMD for the IRA. So, the extra amount I withdraw from the TSP cannot be used to offset the IRA RMD.

Therefore, the following TurboTax question, is very misleading because I am not allowed to combine these amounts (the TSP is a qualified employer plan):

Enter the total RMD and the amount you actually receive. Combine the amounts for all IRAs and qualified employer plans you owned and enter the totals below.

Required RMD Amount ___________

Actual Amount Received __________

The information I enter here is used to determine the additional taxes I owe for not withdrawing the RMD - which is a whopping 50% of the amount I should have withdrawn - and applying for the waiver on Form  5329.

How can report this to Turbotax so they fix/reword this question for next year?

The question is correct

The penalty is the same whether the shortfall is in a 401k, an IRA or both.

When considering your waiver request,  the IRS will want to see in your explanation that you have made up the shortfall in a timely manner from the proper account(s).

@rosm2004 

these days, most custodians are flashing big warnings online about RMD and will tell you the 2023 RMD for that one account.

In any case  once you know your correct divisor, you can easily calculate the RMD,

@rosm2004 

I must be missing something. How is the question correct when I have to consider the IRA separately from the TSP? 

Hypothetical figures that reflect my situation:

TSP RMD = 3,000

TSP distribution = 5,000

IRA RMD = 10,000

IRA distribution = 0

If I answer the question as written:

Enter the total RMD and the amount you actually receive. Combine the amounts for all IRAs and qualified employer plans you owned and enter the totals below.

Required RMD Amount ___13,000________

Actual Amount Received ___5,000_____

This would make my shortfall $8,000. It later tells me that I owe taxes based on this amount and asks how much of the $8,000 do I want waived (for form 5329).

However, the IRS is telling me that I CANNOT combine the RMDs from these two accounts, so since my RMD on the IRA is $10,000 and I didn't withdraw any of that, my shortfall is 10,000, so I need to ask for a waiver on the entire $10,000. 

because the TSP excess cannot be applied to  your IRA RMD,

enter $3,000 for actual amount received,

that leaves $10,000 shortfall in your IRA that must come out of your IRA.

@rosm2004 

The overage $2,000 from TSP is not RMD, nor can it be applied against your 2023 TSP RMD.

And I understand that the penalty is the same whether it's for an IRA or 401k but that's not my situation. If that were the case, the question would work. However, I don't have a shortfall on both accounts, only on one. I have withdrawn more than the RMD on the 401k and apparently that can't be used to offset my shortfall on the IRA. But if I combine both RMDs in that question, it looks like the excess withdrawal from the 401k is offsetting the shortfall on the IRA.

"because the TSP excess cannot be applied to  your IRA RMD,

enter $3,000 for actual amount received,

that leaves $10,000 shortfall in your IRA that must come out of your IRA."

But since I received $5,000, not $3,000, I should enter a fictional amount to force the correct answer? That wouldn't even line up with the 1099R I just entered for the TSP.