Hello. I am completing Part 9, form 5329 on TT Desktop version but not sure if I completed the section correctly. The missed RMD distribution for 2023 was $10K total and taken as lump sum in Feb 2024. Here's how I completed the form: Line 52: 10000Line 53: 053 A Waiver: 10000 + explanation Line 54: "See STMT", "RC", 10000 listed under the dotted line, and then in the calculation box, 0 (this is what I am not sure about)Line 55: additional Tax Smart Worksheet--answered "NO" but not sure on this response as I looked at the instructions and still confused about the "Corrective window". The full distribution for 2023 was taken on Feb 28, 2024 and federal and state inc taxes were withheld at that time too.Line 55: Left blank (also not sure if I should leave blank?)For California State Taxes, TT does not have related questions on the state return for a missed RMD. I checked the Franchise Tax Board website and didn't find anything. Does anyone know if there's an equivalent to form 5329 for California? Does anything need to be reported? Lastly, technically, for 2024 taxes, the 1099-R will likely reflect the 2023 + 2024 distributions and related taxes so is there anything else that needs to happen other than reporting it normally as an RMD? Thank you!

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Form 5329, Part 9 guidance needed for federal and state 2023 and impact on 2024 taxes

Forum|Forum|2 years ago
March 10, 2024
3 replies
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Hello. I am completing Part 9, form 5329 on TT Desktop version but not sure if I completed the section correctly. The missed RMD distribution for 2023 was $10K total and taken as lump sum in Feb 2024. Here's how I completed the form:

Line 52: 10000
Line 53: 0
53 A Waiver: 10000 + explanation
Line 54: "See STMT", "RC", 10000 listed under the dotted line, and then in the calculation box, 0 (this is what I am not sure about)
Line 55: additional Tax Smart Worksheet--answered "NO" but not sure on this response as I looked at the instructions and still confused about the "Corrective window". The full distribution for 2023 was taken on Feb 28, 2024 and federal and state inc taxes were withheld at that time too.
Line 55: Left blank (also not sure if I should leave blank?)

For California State Taxes, TT does not have related questions on the state return for a missed RMD. I checked the Franchise Tax Board website and didn't find anything. Does anyone know if there's an equivalent to form 5329 for California? Does anything need to be reported?

Lastly, technically, for 2024 taxes, the 1099-R will likely reflect the 2023 + 2024 distributions and related taxes so is there anything else that needs to happen other than reporting it normally as an RMD?

Thank you!

Best answer by fanfare

If you are requesting a waiver of the additional tax, Line 54 must be zero,

in which case it doesn't matter if you are in the correction window or not..

fanfareAnswer

Employee

If you are requesting a waiver of the additional tax, Line 54 must be zero,

in which case it doesn't matter if you are in the correction window or not..

cramanitaxAuthor

Thanks fanfare. There's two boxes associated with line 54, one is under the dotted line and the other is outside of it which is why it's confusing. So for the box under the dotted line, I entered 10000 and for the other line 54 box, the value is 0. See inserted image. Does this look correct?

fanfare

Employee

It is the way TurboTax does it..
line 54 is zero which means line 55 is zero.

you are within the correction window so you should mark YES instead of NO.

@cramanitax

dmertz

Employee

The correction window is irrelevant if your are requesting a waiver of the entire penalty. The answer to the question about the correction window only applies if the penalty is being assessed.

nholdway1

I'm wondering about this last part, too. It's not urgent, but I'm curious how it'll go next year when we do the 2024 tax return. Will there be a way to note that the distribution was for 2023? Or does it not even matter because the income comes and the tax would be paid in 2024 anyway, not in 2023? (Which adds to the 2024 tax burden, but those are the breaks, right?)