My return shows an incorrect penalty for a failure to make an RMD as the program has inflated the amount of the RMD I should have received. How do I fix that amount in the program? Can I do a manual override based on the 1099 amount or do I have to inform the IRS in a penalty waiver because of the miscalculation of the Intuit program? I do not want to file a waiver because I can't get Intuit software to post the correct number. Help please.
JLL
The miscalculation comes from Intuit using the wrong factor to multiply for the age. Intuit is halving the factor, in this case from 24.6 to 12.3 (if you follow the math, you will see the problem). This doubles the RMD requirement and results in a reporting of a substantial penalty. I hope that does not affect all RMD calculations for those filing returns. I hope that it is only my return. Be aware of this issue if you have RMD's to report and check your numbers! Do not rely on the Intuit calculation unless you confirm manually in your case that it is accurate. There are IRS charts to determine the divisor based on your age to apply to your balance as of December 31, 2024 for your 2025 RMD.
You need to clear the RMD information you have already entered in TurboTax. To do so, you will have to delete your Forms 1099-R. After you delete the forms re-enter them. When you are asked "How much of the [distribution amount] was an RMD?" Mark the button to indicate that "The entire distribution was an RMD". On the screen with "Let's get more information about your Required Minimum Distribution (RMD)." the program asks "Could you tell us what the required minimum distribution for your account was in 2025?" Enter the same amount that was in box 1 of your 1099-R. Do this for each of your Form 1099-R.
After you have entered all your Forms 1099-R, on the screen with ""Let's check if you met the minimum distribution requirement" the program will ask "Did you take the required minimum distribution (RMD) for 2025 for ALL of your retirement accounts that have this requirement?". Answer Yes, assuming that you have met your combined RMD requirements.
The RMD information that shows may be more than your actual combined RMD amount for the year. That's OK. The information is not included with your tax return and is not reported to the IRS.