Did not get RMD from IRA this year - how do I get TurboTax to generate for 5329 so i can explain?

Forum|Forum|1 year ago
May 16, 2024
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Frustrating here. I am the full time caretaker of my partner and am disabled myself. I simply did not make it to the banks in 2023 to withdraw my RMD's. I did not get any forms in the mail because I didn't make withdrawals. I would like to fill out a form 5329 to explain to the IRS why this wasn't done last year but is done now in 2024. What am I supposed to do in Turbo tax to get this done?

Thank you.

rjs

Employee

Is this your first RMD? Did you just turn 72 in 2023? If so, your RMD is not late as long as you take it before April 1, 2025. In that case there is no penalty and you do not need Form 5329.

If you turned 72 in 2022 or earlier, the distribution is actually late. In that case, you do have to file Form 5329 with your 2023 tax return. Form 5329 calculates the 25% penalty for not taking the RMD on time, but you can request a waiver of the penalty. You will almost certainly get the waiver if taking the RMD late "was due to reasonable error and you are taking reasonable steps to remedy the shortfall." Taking the RMD in early 2024 was a reasonable step to remedy the error. To request a waiver you include Form 5329 and an explanation statement with your 2023 tax return.

If you have any Form 1099-R for 2023, after you enter all your 1099-Rs and proceed through the interview, you will come to a screen that asks you if you received all the RMD that you were required to take for 2023. If you answer that you did not, it will lead you through requesting the waiver and entering an explanation. In the explanation, in addition to a brief of explanation of why it was late, be sure to say that you have taken the distribution.

Are you using TurboTax Online or the CD/Download ("desktop") TurboTax software? Unfortunately, there is a defect in the TurboTax interview that makes it impossible to fill out Form 5329 in TurboTax Online if you did not receive any 1099-R for 2023. The only way to do it is in forms mode, which is not available in TurboTax Online. That means you will have to use the CD/Download TurboTax software instead of TurboTax Online to file your 2023 tax return.

Here's how to prepare Form 5329 in forms mode in the CD/Download TurboTax software if you did not get any 1099-R.

Switch to forms mode, click the Open Form icon at the top left, and open Form 5329. (There are two copies of Form 5329. Form 5329-T is for the taxpayer, and 5329-S is for the spouse on a joint return.) You only have to fill out Part IX, which is the last section all the way at the end of the form. Enter the RMD amount that you should have taken in 2021 on line 52 and zero on line 53. Between lines 53 and 54 there is a box where you can enter the amount you are requesting a waiver for, which would be the same amount that you entered on line 52. TurboTax will make the necessary entries on lines 54 and 55. Then click the Explain button to open the Explanation Statement form and enter your explanation. In your explanation statement, briefly state the reason you did not take the RMD, to show that it was "due to reasonable error," and state that you have rectified the error by taking the distribution in early 2024.

The Form 5329 and the explanation statement will be included in your tax return.