Error with reporting RMD. TT calculates a $7000 tax penalty for timing. I can't correct it.

Forum|Forum|11 months ago
April 9, 2025
1 reply
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For my 2024 federal return I download the information for my RMD from my institution. I withdrew all that I was supposed to long before the end of 2024, then gave most of it to charities. So about $10K is taxable income. It handles that fine, but then it makes errors on form 5329 and calculates a $7000+ tax penalty.

It should not be using form 5329 (additional taxes on qualified plans) at all. It seems to be thinking that I failed to take the full withdrawal in 2024. But there is no way to debug it.

I can't figure out how or why it is doing the calculation. I tried deleting the data and downloading it again, but it didn't help. I tried giving it a date for when I made the withdrawal, but it made no difference.

Is there any way to manually enter data in a 5329 form to correct the error?

Thanks.

TurboTax PLUS Online

DanaB27

Please follow these steps:

Click on "Search" on the top right and type “1099-R”
Click on “Jump to 1099-R” and enter your 1099-R
On the "Required Minimum Distribution" screen enter RMD for this account
On the "How much of This Distribution Applied to your December 31, 2024 RMD" select "The entire distribution applied…" / or select "Some of this distribution…" and enter the RMD amount (include the RMD amount that went to charity)
Answer the "Transfer to Charity Screen"
On the "Your 1099-R Entries" screen click "Continue"
On the "Did You Miss a Required Distribution From Any Retirement Accounts?" screen select "None of these plans failed to withdraw the RMD" if you met all of your RMD for 2024.

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sfeareyAuthor

Thank you for your response to my question. I found the problem. It turned out that when I entered my government pension, Turbotax assumed it was a second RMD, in addition to my IRA RMD. That triggered form 5329 which calculated a whopping penalty for some reason or another. I figured this out after hours of experiments with my IRA RMD reporting. Finally I went to the entry for my pension and found the mistake. Once I said it was not an RMD, it deleted form 5329. Then the calculations for my RMD were correct. Turbotax makes it increasingly diffecult to find and debug errors.