Question

Can I attach explanation letter and file form 5329 using Turbotax Online?

Forum|Forum|2 years ago
March 4, 2024
2 replies
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"I need to attach reasonable cause letter for missing RMD and taking it upon discovery. Can this be done with Turbotax Online?"

TurboTax Deluxe Online

E

ee-ea

Employee

To add a letter to a tax return you must file on paper by mail.

D

DanaB27

If using the TurboTax Online version and have no 2023 Form 1099-R to file, you will have to prepare the 5329 manually.

Download Form 5329 from the IRS website and fill it out the same as above. Print and mail your return with the 5329 form and explanation attached as described in the 5329 instructions. The 2023 Form 5329 must be attached to your printed and mailed 2023 tax return and cannot be e-filed.

Please be aware that you can only use this method if you are requesting a waiver of the penalty and there is no taxable amount on Form 5329 form line 55 that must be transferred to Schedule 2 line 8.

Another option is to use TurboTax Desktop software in form mode if you do not have a Form 1099-R to file:

Enter the forms mode and click on "Open Form" and type "5329".
Scroll down to Part IX line 52 and enter the RMD amount that should have been taken. On line 53 enter the amount of the RMD that was actually taken (probably zero if it was missed).
Then in the box right under line 53 "Waiver of Tax Smart Worksheet" enter the same amount as line 52 (the RMD amount).
Click the "Explanation" button and enter the reason for missing the RMD and your statement requesting a waiver.

If have a 2023 Form 1099-R entered then please use these steps in TurboTax Online:

Click on "Search" on the top right and type “1099-R”
Click on “Jump to 1099-R”
Click "Continue" and enter the information from your 1099-R
On the "Your 1099-R Entries" screen click "Continue"
Continue until "Tell us more about the retirement plan distribution" screen and select "I did not receive all the RMD for 2023" and click "Continue"
On the "Required Minimum Distribution" screen enter the RMD amount and actual amount received
Enter information on the "Let's see if we can reduce your tax bill" if you want to apply for a waiver.

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B

bel21

Using the Desktop. I did not receive the inherited IRA distribution in 2023 even though I submitted the RMD withdrawal request to the brokerage firm. They finalized it on 1/02/2024. This is a not taxed (Box 7 Code Q). I downloaded the form, filled it out and have a printed out letter of explanation.

My question is do I fill out a 1099-R in the turbotax interview for it even though I did not receive it? Doing a search of past community questions seems to suggest I do. I think I do not.

J

JotikaT2

No, you will not fill out the information for a 1099-R form in TurboTax if you did not receive any 1099-R retirement distributions in 2023.

Form 5329 does still need to be completed since you did not take the required RMD in 2023 per the excerpt shown below based upon the instructions here.

Also, just to clarify, if this RMD is from an inherited IRA, you may not be required to file Form 5329 for 2023.

If you inherited the IRA in 2023, and did not take a RMD, you may not need to request a waiver if no distributions were made on Form 1099-R. Please see this IRS page which references IRS Notice 2023-54. It states that non-spouse beneficiaries are not considered to have failed the RMD requirements if they are subject to the ten year distribution requirement.

@bel21

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