RMD Penalty

Forum|Forum|1 year ago
February 6, 2025
11 replies
80 views

I have five IRA annuities. On four I took more RMD than was required. On the fifth one I took less than was shown for that RMD. However, the total that I withdrew came to a little over the total that was required for all five. And yet, Turbotax is showing that I owe a penalty of over $400 tax on excess accumulations in my retirement account after I enter that fifth RMD. If the total is covered why would I be penalized?

TurboTax Basic Windows

DavidD66

Level 15

If you are confident that you have taken enough in distributions to satisfy your RMD for all of your combined IRAs, then you can answer No to the question "How much of the $[Distribution Amount] was an RMD?" for each distribution. The program will not ask any additional RMD questions. Nor will it calculate a penalty for taking your required RMD.

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jeangearAuthor

Level 2

It would not let me answer No. I could only enter an amount. I finally talked to someone. After a full hour on the phone she finally talked to someone else who said there was a "known software problem" and I would be contacted when it was fixed. I waited six days with no contact, then called again. Talked to Greg. He saw that there was a problem and I should not be charged the $404 tax penalty. He said he was transferring me to a tax specialist to see if there was a work-around so the tax penalty could be removed. I also asked that the higher charge for Live Premium be changed back to the original $89 since the problem was software and not my fault.

I assumed that during the time I was on hold Greg was talking to a specialist about what the problem was. When she finally came on, she didn't go over any of it with me. She just said it was fixed and I would not have a penalty, and that she had given me a credit for the higher Turbotax charge. She could see my screen and was telling me what to do. I finally realized that she was just walking me through finishing and filing the return. I told her I wasn't comfortable with filing because I wasn't sure the tax penalty had been removed. She assured me that there was no penalty and I could file. I took her word for it and filed. Afterward, I printed out my tax return and the tax penalty was still there!!! And the Turbotax charge showed a total of $199. What do I do now?

DanaB27

Level 15

Try to click continue after you entered all your Form 1099-Rs and answer "Yes" on the "Let's check if you met the minimum distribution requirement" screen.

If that doesn't work you can you try to delete and reenter the Form 1099-Rs:

Login to your TurboTax Account
Click on "Search" on the top right and type “1099-R”
Click on “Jump to 1099-R”
On the "Your 1099-R Entries" screen click delete all Form 1099-R and reenter them
Continue until "How much of the $XXXXX was a RMD?" screen, select "The entire distribution was an RMD" (or select "Only part of this distribution was a RMD" and enter the amount of RMD) and click "Continue".
On the "Let's get more information about your Required Minimum Distribution (RMD)" screen enter the amount of the RMD from this distribution again.
On the "Your 1099-R Entries" screen click "continue"
On the "Let's check if you met the minimum distribution requirement" screen answer "Yes" since you took all necessary RMD