Turbo tax 1099 R entry error concerning RMD reporting

[J_W_Bishop]

As described elsewhere in this thread, there is a real issue about just assuming you can round (from a precisely known reported value) the reconciliation of the amount considered the RMD portion of the total on the 1099-R, especially when:

•  The 1099-R is probably issued by a financial entity that computed, knows and has already reported the actual portion (to $.01) to the IRS.

•  One or more of the 1099-Rs with an RMD may require special treatment (like certain beneficiary IRAs) and its RMD was hand-calculated and not reportable in advance to the IRS, but still must be reconciled to the penny.

•  You may be reconciling multiple RMDs with one, two or all your 1099-Rs which can be reported as fulfilled from just one (or more) of the 1099-Rs you've received (ie:  You can fulfill an RMD's requirements with excess distributions from another retirement account.).
•  Excess distributions from a retirement account (beyond the portion used to fulfill RMDs) can also be a) rolled over to another new or existing IRA - where the "pennies" are going to be required - or b) optionally designated as a special type of non-taxable charitable contribution - also requiring precise accounting.

These are just the basics and all are susceptible, because of the complexities (we've only investigated our own situation, which we believe isn't that unusual), to triggering an audit, even if there's less than a dollar at stake.  We're aware that we can "fudge" the reconciliation to make the faulty software work, but we'd rather not, nor we guess, would Intuit who hasn't let me down since my 1991 MacInTax return!  This thread seems to indicate that there is a common error in the Windows software too.  Let's hope someone figures this all out.

[carltonroe]

I have the same problem, still not fixed 2/4/2024.

[carltonroe]

This appears to have been fixed with an update today on my 2024 MAC version. It doesn't appear in red anymore and doesn't result in an error to be fixed. I still don't see the cents, tried to input them, but it still seems to round. It doesn't come out as an error when error checking anymore. 

[VolvoGirl]

About rounding.   Turbo Tax rounds all amounts.  The IRS wants all amounts rounded.  See IRS 1040 Instructions Page 23 3rd column Rounding off to whole dollars

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

[carltonroe]

I would have to disagree with your assessment that the IRS wants all amounts to be rounded. The reference you made said a filer "can" round. So it is optional, in my opinion. It should say "should" if that is what they want. 

It also says, "If you do round to whole dollars, you must round all amounts." So If I decide not to round when copying amounts from, for example, a 1099, Turbo Tax should not round in the worksheets. But they do seem to round in the final form, so you do have a point there.

[DaveGrant]

Also fixed in today's software update for Windows users! Though I still can't figure out what RMD Excess Contribution Block is for or does. Seems unnecessary tio me.

[J_W_Bishop]

Like @carltonroe , I disagree with your interpretation of the instructions associated with reporting Income (the name of the document section from which you quote).  Those instructions do seem to specify rounding is optional ("can").  You may forget that some taxpayers fill out paper forms with a pen or pencil, and I can't recall (and I'm old enough to do so) getting my tax form rejected by entering income or any other number precisely.  I'll grant you that it's to the benefit of the IRS to accept rounded approximations - even to require software that prepares tax returns to do so in submitted forms, but this terrible "reconciliation" of RMD combinations and summarizations is on a WORKSHEET which is supposed to help me (and Intuit, I assume) to get the reporting of a certain taxable activity - which notably could easily be audited, is too complex, and has as much as a 50% penalty for getting it wrong - exactly correct.  

How about this:  All numbers in non-filed worksheets should allow entry at full precision and round their output only if it's destined for a field that must be reported as rounded (IRS forms, other worksheets and data fields that work with whole dollars, etc.).

Kudos to Intuit for not continuing to make unrounded input compared to its rounded equivalent an error so we can proceed to file our taxes.  I'm also a teeny bit alarmed that this community forum seems to be where technical problems are getting reported, simply by mentioning them.  I looked everywhere I could find where one reports a bug, gets an acknowledgement, allows you to track it, gets a resolution (either way).  I've fallen in with lots of knowledgable and enthusiastic users here, but who answers for software engineering?  On a positive note, I'm piling up lots of "badges"!

I notice that Intuit seems to allow (and keep) precise values in those double-click total detail box gizmos and handles the rounding of those totals where required.  If they're clever enough to do that, they could easily fix RMD reconciliation to make some sense and work properly.

[DannSo]

DannSo

New Member

I have tried ALL of the RMD "fixes" recommended here and elsewhere and still cannot get passed this glitch. When exactly can I expect a real fix from turbotax? It's quite frustrating!

[dochs]

I to have this problem. I have 7 IRA accounts and took my RMD out of 4 of the accounts.  I do not see a way to tell turbo tax about the accounts that I did not take any payments from.  I cannot file my taxes until I know the correct way to make the entries in turbo tax.  I have been using turbo tax for thirty years, and suddenly I cannot file my taxes. Please let me know how to fill out the form correctly so that I do not get errors and penalties!

[J_W_Bishop]

I'm sorry @dochs, that I'm in complete sympathy with you.  Without acknowledging that I even know what I'm talking about, it seems the RMD worksheet is unusable (and certainly unexplainable) as of the latest updates.

Ideally, lines A and B in the 1099-R RMD section should reflect A) the calculated pre-determined 2024 RMD for the retirement account and taxpayer represented by this 1099, and B) the portion - in dollars from this 1099-R - chosen by the taxpayer to help fulfill their total 2024 RMD obligation for 2024  This could then allow proving the total of all line B's to be sufficient to satisfy the total of all line A's, and to determine the excess distributions as the difference between the total of each taxpayer's 1099-R's and the total of all line A's of the taxpayer.

But, of course, this won't work, as line B is plugged from the RMD "gross distbn" [sic] field or from box 1 or 2a, so you can't indicate how much of this 1099-R contributes to your total RMD obligations.

Such a worksheet would be a convenient part of my tax preparation software.  Oh…