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Question

Turbo Tax is appears to be handling each IRA distribution and RMD on a case by case basis, rather than aggregating as intended and approved by the IRS.

Forum|Forum|1 year ago
February 6, 2025
7 replies
0 views

Turbo Tax is handling each IRA distribution and RMD on a By using the current Turbo Tax approach, when a single IRA distribution fails to satisfy its corresponding RMD, Turbo Tax computes the tax for failing to distribute the appropriate funds from the IRA. The correct approach is to aggregate IRA distributions and aggregate RMDs, then make the comparison. I have both called and written Turbo Tax with assurance that the process is correct, when it obviously is not.

VolvoGirl

Yes Turbo tax changed it this year. Lots of complaints. When it asks about the RMD it is only asking for that one 1099R you are entering. You need to enter the amount from box 1 on that single 1099R for the RMD, not the total RMD for all and even if it is more or less than the total.

finsr

If that is the case, how do you account for the second IRA if you don't have a corresponding 1099-R even though the aggregated RMD is satisfied?

Example: IRA-A distribution $10,000, RMD $2,000 1099-R received

IRA-B distribution $0 RMD $1,000 no 1099-R

The RMD is satisfied for both accounts as the distribution was $10K, but how do you acknowledge the IRA-B to the IRS in TT without a 1099-R?

finsr

I believe I can simply aggregate the required RMDs and enter that for IRA-A.

choeni1216

Turbo Tax reps have given me different answers when I have chatted on line with them. Then I got an email from them that they know they have a problem and are fixing it. A day later I was notified the problem was correct but when I went to complete my 1099R section it was still incorrect. Wrote them back and they told me they were still working on it. Over a week later and I have hear nothing. Hate getting my taxes DONE early only to have the program screw up. I have been doing RMDs thru Turbo for a number of years and never had this problem before.

garycohenMN

A workaround that works for me is to enter each of the 1099R forms individually and then open the tax form 5329T, and use the EDIT>OVERRIDE function for lines 52 and 53. That allows the user to enter manually the sum of all RMDs for qualifying IRAs on line 52a and the sum of all distributions for the same qualifying IRAs on line 53a. Then one follows the intsructions on lines 54 and 55. That will yield the amount of any tax penalty that is due or produce a zero if total of the distributions met the sum of the RMDs. The result will be entered automatically in the appropriate place on the form 1040.

JHLevin

As a technical matter, how do you open the Form 5329? I am not seeing any way to bring up that Form while I'm completing my 2024 Return on TurboTax. I find it on the IRS website, but a search on TurboTax does not bring it up.

Thanks for any further assistance you can provide.

CKM Too

In addition to not accumulating RMD from different accounts, an RMD amount has to be entered for other plans such as Cal PERS in order to eliminate the penalty in Turbo Tax.

JLMcK

I thought I was the problem at first but finally concluded that the program is faulty. I Googled the issue and came upon this community. I'd like to finish my taxes with Turbo Tax but it's obvious they haven't addressed the problem. I called and they created a ticket for IT. No guarantee on how long it will take. I may just switch to another provider despite putting a lot of work into this already.

DawnC

Some TurboTax customers may receive an error, RMD amount should not be less than the distribution amount that is for the RMD. Check this entry, when the RMD and the amount applied to RMD are the same.

We’re currently working to resolve this issue. If you’d like to receive progress updates, sign up below. @JLMcK

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

choeni1216

There are never any progress reports. All I keep getting is messages from other users that there is a problem and Turbo Tax appears to be handling them individually. Well I started my tax return in January and it is still not solved. After speaking with 2 reps with different answers I am afraid to submit my taxes!

tcrump50

Turbo tax is still not calculating RMD correctly. I have triple checked and it is still telling me I have not made my RMD for 2024.

choeni1216

Same problem and I have been doing this since the last week of January. Still no answers from Turbo Tax. At one point I got a response to wait to file. I have been waiting 6 weeks now with now no luck! Guess I'll lay out the extra money to have one of their people complete my tax. Normally, I wouldn't mind but have had RMDs for 3 years and never had a problem. If it's a computer glitch, you think they could fix it. Makes me wonder if you'll get audited this year at the ripe old age of 76.

mz14

When I enter the information on a 1099 R with is for my RMD distribution, turbotax ask for the amount of the RMD to be paid for this entry. The entry IS the RMD. I can't calculate the amount, do I enter the entire amount?

JLMcK

If your total gross distribution is the RMD then when the program asks for the amount of RMD, input your gross distribution. You have satisfied the RMD requirement.

PatriciaV

Please clarify if the second distribution was an RMD for 2024 and the date that RMD was paid.

@1koilady

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fhcotton

I agree, the 2023 version of TurboTax Deluxe dealt with multiple IRAs correctly and did not calculate a penalty if you used only one to withdraw the total RMD amount!! A revision is needed!!

NIkiPatt

I am using the Desktop Home & Business and hope the following worked. I'm sorry to do this so "101" style but wow this one promises to be quite an issue if the IRS decides to dance on the heads of pins...with lots of letter writing down the line.

(1) I took my whole RMD plus additional funds from one of the two retirements accounts I have. (A & B)

(2) I received a 1099-R from account A.

(3) I did not receive a 1099-R from account B. since I took no funds from there

(4) I filled in the amount applying to account A on the window in which said "we need to know the RMD for THIS account only." (which was only 1/4 of the total RMD.)

(5) I clicked "The entire distribution applied to the 2024 RMD" (Even this phrasing was confusing. It should have said "The entire distribution applied to or was greater than the 2024 RMD")

(6) I went into form 5329 and filled out ONLY part IX. Which asked for the RMD amount from the account for which I received a 1099-R and took the funds and then on the next line asked for the RMD amount due from the account from which I had not received a 1099-$. . . I filled in the right amount on the "Distribution" column which covered them both -- zeroing the balance due so I didn't have check "Corrected" at all.

(7) I also filled out the Grand Totals at the bottom of Part IX for what was owed and what was distributed (i.e. no correction needed.)

and left it at that.

To best honest, after years of doing returns for myself and others this one is one of the worst "possible to screw up" ones and worries me. Anybody else have a better solution?

billjans

I had the same situation (all the RMD and more for both Accounts A and B was taken only from Account A). I used the TurboTax Deluxe Version. At the time I did my taxes back in February, I do not remember if TurboTax had applied all the fixes that may have come later. In any event, Part IX of the 5329 Form was filled in, I believe, as you describe, but I needed to manually complete Lines 52 and 53 at the bottom of this section, also as you describe (no correction needed). TurboTax did not detect an error when running the Checker prior to filing. Hopefully, the same will be the case when the IRS does it checking.