I have a simple IRA. I took all of the RMD and made a QCD of the full amount. It is not an inherited IRA. Yet TT keeps telling me that "it sounds like you needed to take money out of a simple IRA early." I did not take money out early, just the RMD. How do I stop TT from insisting that I took money out early and thus I have an extera tax bill.
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Do you mean it's an ordinary IRA? QCDs are not permitted to be made from a SIMPLE IRA. (A SIMPLE IRA is an IRA associated with an employer-provided SIMPLE-IRA plan).
QCDs can only be made from from a traditional IRA (other than an SIMPLE IRA or an ongoing SEP IRA) or, in some cases, from a Roth IRA. If a code-7 Form 1099-R does not have the IRA/SEP/SIMPLE box marked, the distribution is not from an IRA and a QCD is not permitted to be made from that account.
If TurboTax is saying that you took out a distribution early, it seems that the code in box 7 must be including code 1, indicating that you were under age 59½ at the time of the distribution.
What code is in box 7 on the 1099R? Double check your birthdate under My Info. Are you married? Is your spouse younger? Make sure the 1099R is entered for the right spouse.
And FYI - If you edit or review a 1099R it does not keep your answers from before but resets them to the defaults. Then you have to go through and answer them all again. So be sure to go all the way to the end of the 1099R section. They are right unless you go back.
My error, it is an ordinary IRA.
I had scanned the 1099-R into TT and that's where the error happened although it wasn't apparent from the scanned 1099-R; it kept defaulting to SEP and then insisting that it was inherited So I deleted the scanned version, typed it in myself and now it appears that all is well. Thank you very much for your help.
I'm not sure what error occurred upon scanning the Form 1099-R, but since the distribution is not from an inherited IRA, to be a QCD the code in box 7 must be 7 and the IRA/SEP/SIMPLE box must be marked.
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