I have 3 401 k's but only took distributions from one account. I was able to enter my RMD for that account, but then it asks me if all of my RMD was from that account. I say no and it says wait to file your income tax. When will this be fixed? I have reasons why I need to file quickly. Or is there a workaround for this?
Did you only take a RMD from 1 account? You have to take separate RMD from each 401K account. You can’t combine the RMD for 401K plans line you can for IRA. So did you miss taking RMD from the other 2 accounts? You will owe a penalty.
Oh goodness no! I haven't even sent in my tax forms yet. I was just asking how to include the other 2 accounts in the RMD. Do I just total all 3 and put them in the one box? What was confusing to me was the note to wait to file my taxes... I wasn't sure if a fix was coming where I could enter the other 2. I have no intention of doing something incorrectly - just trying to figure out the correct way to do it.
Despite the obtuse note from TurboTax, @VolvoGirl is correct.
Each 401k has to be individually satisfied by Dec 31 2024.
You have excess accumulation in 2 accounts. Refer to 2024 Form 5329 Part 9.
TurboTax may be telling you to delay filing until you take corrective action,which can reduce your penalty from 25% to 10%.
That's one way to read the new Form 5329, which is also confusing.
Based on my preusal of the new Form 5329 (sans Instructions),
you would enter your RMD amount $nn,000 on lines 52b and 53b
Lines 52a and 53a have to be zero since you took no action.
This results in no penalty.
cc: @VolvoGirl
cc: @dmertz
There is no penalty. I withdrew twice as much as the RMD - I was just trying to figure out how to enter the amounts for all 3 funds. I think I know what to do now. FYI, the IRA worksheet for calculating the RMD says you can take the money out of one or all of the accounts. It doesn't appear that you have to withdraw from every one of them.
The rule for 401k is (or was) different.
can you explain how to fill in the new Form 5329 in this situation?
See my comments above. It does not generate a penalty.
Instructions for Form 5329 (2024)
Qualified retirement plans (other than IRAs). Qualified plans
cannot aggregate distributions for purposes of meeting the
minimum required distribution requirement. You must figure the
amount of the minimum required distribution separately for each
plan and withdraw that amount from the specific plan.
Developers are still working on the ability to report that RMDs were not satisfied overall.
As it currently stands, it might be possible to fake TurboTax out by adding the RMD amounts for the three 401(k)s together and entering that total as the RMD required of the one 401(k) from which the one RMD was satisfied. All TurboTax presently does is add all the required amounts together for inclusion on Form 5329, so it doesn't really matter which Form 1099-R the unsatisfied amounts are added to. Form 5329 only shows the totals.
Form 5329 doesn't make sense to me.
Still waiting for an explanation for manual entry, not for failings of tax software..
The wording seems awkward to me too. In general, I would read it literally with help from the IRS instructions for the form. The intent is to implement the changes that the SECURE 2.0 Act made to how the excess-accumulation penalty is determined (either corrected within the correction window or not).