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Level 3

Question

Error calculating TAX for RMD

Forum|Forum|1 year ago
January 13, 2025
9 replies
0 views

I have multiple IRA accounts. I calculated the RMD amounts for each one, however I took a small portion of the required RMD from one account with less cash, and the remainder from an account with more cash.
I have always done this for years with no problem, since the tax code doesnt require you to take the exact amount from each account as long as you take the REQUIRED total.
When I enter this in TurboTax 2024, It shows a penalty due on one of the accounts and adds two thousand dollars of tax due. If I put the required amount in the field for each account, which is not where the money was taken from, it calculates correctly.
Am I going to have to scrap this TurboTax and do my taxes manually? I have been using TurboTax for MANY years, and can't believe how difficult it is to get support!

VolvoGirl

Level 15

Yes they changed it this year. See these two posts by dmertz. He has a handle on it.

https://ttlc.intuit.com/community/retirement/discussion/can-i-determine-why-turbo-tax-thinks-i-did-not-take-out-my-rmd/00/3418760

https://ttlc.intuit.com/community/retirement/discussion/withdrawing-more-than-the-rmd-from-an-ira-bda/00/2589658

dmertz

Level 15

For each Form 1099-R, indicate no more than the gross-distribution amount (Form 1099-R box 1) as the amount of RMD required to be distributed from that account. Presumably that will mean entering an amount less then the actual RMD for the account associated with the Form 1099-R for the smaller distribution and entering an amount larger than the RMD for that other account (but still no more than the gross amount distributed from that account) for which part of the distribution was to satisfy the RMD for the other IRA. The sum of these two entries should be the total RMD required for the two IRAs combined.

VolvoGirl

Level 15

@dmertz What about if you didn’t take out the total RMD from all accounts like if you forgot one or took the wrong amount?

dmertz

Level 15

Then for one of the entries you'll have to enter more than the gross-distribution amount such that the total of the entries still equals the total RMD required. The original question above indicated that the full RMD was satisfied, so my previous reply intentionally didn't address the situation where some amount of RMD remained unsatisfied.

sandylw81

Level 3

I just found the same problem. Will turbo tax get this fixed? If I show money coming from the accounts the RMD was taken from then it shows a penalty because no RMD was shown on the other withdrawals. Not good

MarilynG

Level 15

When entering a 1099-R in TurboTax, if you are asked if this distribution is RMD, indicate Yes. When asked if all or part of this distribution is RMD, indicate All.

The IRS doesn't know what your RMD should be, how many Retirement Accounts you have, or if your RMD was taken from one account or parts from several; it's the duty of your Plan Administrator to include required RMD in any distribution you take from a Retirement Account.

For instance, if you have 1099-R's from two accounts, and your RMD was satisfied with a distribution from the first account, answer Yes and All when entering both 1099-R's.

Here's more info on What is RMD?.

@sandylw81

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

shlaw47

Level 2

I agree, TurboTax has a programming error or an error in the instructions. I take LESS than the RMD from one account where most of the dividends and interested ate reinvested, and more than the RMD from an account that takes the dividends and interested ate reinvested as cash. These add up to my TOTAL RMD. When entering data into EACH account, the last field asks how much was taken from that account. If you enter the correct data, it’s in under on one account and an over on the other. In my case it raises my taxes due by $5,000.00. Apparently TurboTax isn’t doing math on the TOTALS of this field and treats them individually. The communities response was to put the RMD amount in those fields rather than the amount actually withdrawn. If that’s the way you’re supposed to do it, which to me seems wrong an why have the field then, then the instructions should say that, not just say enter the amount taken for each account entered

in my opinion it is a major programming issue. They should be comparing the Totals.

I had the same error. The program wants you to provide a waiver form, but this is not required. The IRS website clearly states the total amount of required distributions can be taken from one or more accounts rather than separately from each account. Turbo Tax needs to fix or this is the last year I am using it.

wbmeredithAuthor

Level 3

To expand on this original issue... We have a couple IRA's that we did not withdraw any funds from, as we took the RMD from an account with cash. Since we didn't receive 1099 forms for these, where do we enter the amounts of RMD required? Since I'm being told to just use the RMD amount in that final field in order not to cause a penalty or increased tax, I can't enter it there.
There is a major malfunction with this section of TurboTax, and it looks like I wasted money on the program, and I'll end up printing forms and doing my taxes manually.
How do I get TurboTax to address this or respond to me?
I have been using TurboTax for MANY, MANY years, and fortunately have never needed help, which is a good thing because I can't seem to get "TURBOTAX" to help now.

sandylw81

Level 3

I have been using turbo tax since it first came out as my son worked for them at the time. I can't even tell you how long. Any way I have talked to one person at turbo tax as she said there is a problem and to keep checking back to see if it gets fixed, otherwise she said just put in each amount withdrawn as the RMD so I will only be paying the Federal Tax due. In other words lie to Internal Revenue.

I don't think turbo tax reads our messages, if they did I think we would be getting some responses.

didaviscpa

Level 4

I agree with you that it is not being done correctly. It seems Turbotax is not adding the amount that you took out more from one IRA and comparing it with the one you took out less wherein you took out in total what is required. On 1099-R under section RMD I checked entire gross is RMD and entered the same amounts in the RMD excess accumulation worksheet in A & B as what I entered on line 2a of the 1099-R. It is not correct, but it seems like the only way to avoid the extra tax in Part IX of Form 5329. Hopefully Turbotax will correct their calculation.

sandylw81

Level 3

Has anybody received an answer from Turbo Tax about this problem? I really wonder if they ever check the community discussions.

VolvoGirl

Level 15

They are aware of this.

plpollack

Level 5

I have two IRA's and ran into the same bug - ridiculous.

I am going to do what others have suggested - put in the RMS for each account that matches my w/d from that account.

I hope TT fixes this next year.

ndg42598029

Level 2

Turbo Tax won't file my return electronically. It keeps giving me an error saying my RMD should not be less than the distribution amount. What?! I took out more from IRA than RMD required. That can't be so unusual.

Is my only option to mail my return?

robrien

Level 2

Hi,

I'm having similar problems. The Turbotax 2024 program does not appear to recognize that a Qualified Charitable Distribution (QDC) can be counted towards satisfying a Required Minimum Distribution (RMD). My 2024 annual withdrawals from a TIAA retirement account plus a QCD from this same account easily satisfy my RMD for 2024, but Turbotax 2024 says otherwise.

VolvoGirl

Level 15

Again.....Turbo Tax changed this year. When it asks about the RMD it is only asking for that one 1099R. You need to enter the amount in box 1 on that 1099R for the RMD, not the total RMD for all. Even if they would add up to more.

shlaw47

Level 2

I received an email today saying error was fixed, but I updated software and it has NOT been fixed. Still calculating additional penalty. Turbo tax stinks this year

user17645973951

Level 2

Same here; no joy after installing the update. I entered the amount that each of my two accounts said had to be taken out and the 1099-R stated the actual amounts taken out of each, which added up to a bit more than my required distribution. TT still asked if I'd fixed things during the Correction period even though there was nothing to fix. Once again, it appears not to have added the amounts from the two 1099-Rs and compared it to what my total RMD should be.

The instructions are unclear as to what is to be entered for each account, so I'm entering what the financial institution says should be the RMD for each account and TT is picking up the actual amount dispersed from each 1099-R.