Entering RMD for each 1099R

[rosm2004]

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

[rosm2004]

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. 

[fanfare · Accepted solution]

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 

[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?

[fanfare]

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 

[fanfare]

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 

[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. 

[fanfare]

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.

[rosm2004]

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.

[rosm2004]

"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.

[fanfare]

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

@rosm2004 

[rosm2004]

Thanks, Fanfare. I think I finally understand what you are saying.

For the amount received, I should only enter the RMD amount that I received from the TSP, not the actual distribution that was reported on the 1099R, because the extra 2,000 cannot be applied. If that is the case, then the question should still be reworded since the average person, like me, would have no idea.

Even my investment advisor didn't know. He thought the TSP excess could be used to offset the IRA RMD - but not the other way round. Although, the IRA account specialist from the same firm didn't think it could be used that way. Of course, both of them caveated whatever they said by telling me they weren't tax specialists. 

[Speyman]

I am 75 years old and have been receiving a fixed monthly retirement payment with tax withholding for at least 15 years as reported on a 1099-R. This non IRA account has never been subject to a RMD requirement, yet the 2024 version of turbo tax is defaulting to treating it as a RMD like an IRA. I have re-enterred the 1099-R 5 times without being able to get Turbotax to handle the 1099-R correctly. It also threatens me with a tax penalty which is BS. How can I get this 1099-R entered correctly as a non RMD 1099-R? BTW-the 1099-R has the same information on it has it has had since payments have started years ago-no changes in 1099-R information. Regular IRAs seem to be handled correctly. Be happy to provide screen shots to Turbotax personnel to problem solve the software.

[DoninGA]

@Speyman Is the income from the 1099-R in question from a pension or an annuity?  If so, the total received for the year is an RMD.

[fanfare]

all bets are off since TurboTax revamped the processing of IRA distributions for 2024.

The questions are completely different now versus two years ago.

@Speyman