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bdiamondmd

Question

I have multiple IRAs. In total I have withdrawn my full RMD but not the full RMD from one of my three IRAs. Why is TurboTax calculating a penalty?

Forum|Forum|1 year ago
January 27, 2025
6 replies
0 views

No text available

MinhT1

In your case, there is no penalty. You can answer in TurboTax that you have satisfied all RMD requirements.

An IRA owner must calculate the RMD separately for each IRA that he or she owns, but can withdraw the total amount from one or more of the IRAs.

Similarly, a 403(b) contract owner must calculate the RMD separately for each 403(b) contract that he or she owns, but can take the total amount from one or more of the 403(b) contracts.

However, RMDs required from other types of retirement plans, such as 401(k) and 457(b) plans have to be taken separately from each of those plan accounts.

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bdiamondmdAuthor

The message was not responsive to my inquiry. TurboTax asks about each IRA individually and determines if a penalty is due based on the answers on each one. It does not add up all distributions and compare against total RMD, thus falsely calculating a penalty.

VolvoGirl

Employee

Turbo Tax changed this year. When it asks about the RMD it is only asking for that one 1099R. You need to enter the amount in box 1 on that 1099R for the RMD, not the total RMD for both. Don't worry if they don't add up to the actual RMD for all.

peterholmes9

I have this same problem. No matter how I enter the RMD related questions, TT generates the excess tax. I am working with support to resolve this, but have received no answer yet. This is definitely a bug,. On the excess tax form/worksheet, TT only reflects one of my two withdrawals (the one that is less than my RMD for that account).

dan_in_MI

Intuit,

You have not responded on this message. Please respond if you agree this is a Turbo Tax problem, and when a correction will come out.

I have the same issue. So I don't disclose my personal details I put in these test numbers.

IRA 1 has RMD of $11,000, distribution was $3,000, all applied to RMD;

IRA 2 has RMD of $20,000, distribution was $28,000, all applied to RMD;

Clearly the full RMD of $31,000 is paid. Even though I answer that question YES, I paid my full RMD, Form 5329 calculates an underpayment of $8000 and a tax (penalty) of $2000 from IRA 1, and ignores the over payment of $8000 on IRA 2.

Please do one of two things for me:

1)Agree that the behavior of TT is incorrect and provide a correction date or

2)Tell me what I should do to make it work.

If you can't reproduce this problem, please contact me for more information, because this is a real issue for me.

Thank You!

VolvoGirl

Employee

Did you try this? 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 than the total.

Pottomania

Employee

You say, "You can answer in TurboTax that you have satisfied all RMD requirements.."

How do I do this?

DelGman

I just now got off the phone with prouct support. After some time searching, the young lady informed me that as of 12:45 PM today, TT has begun working on a correction to the issue so clearly discussed here. Allegedly, anyone who has supplied their email address about this will be notified when the issues is resloved.

Time, as they say, will tell. G

wja

DelGman, Thank you for the information

Rarichman2244

I have 2 accounts. One from an annuity. The annuity pays more than the RMD for that account. So I take less than the full in the other IRA, the total being over the minimum for the total of both. On the 1099 R form, enter the actual required amount for that account, then enter the distribution taken. Do that in each account regardless of whether over-or under. Make sure you check the entire gross applies to the 2024 RMD. THEN IF YOU CLICK THE QUICK ZOOM TO FORM 5329, it will show you’ve paid the appropriate total RM d, and no penalty. Make sure you don’t combine different individual’s RMDs, like a spouse as that is not allowed. Try it and get back to us.

DanaB27

It seems you have the latest update. No, generally when you update then you do not have delete and start over again. But it might be a good idea to use VolvoGirl's suggestion to delete and reenter Form 1099-R.

If you had a penalty you would see it on Form 5329 line 55.

@Teacha214

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bflobob

Thanks to all that answered. I am using the online version. I did delete all IRA account RMD imports as per one suggestion and started over again. This worked to handle the multiple RMD's' adding to the correct total and I was able to proceed.

Then a new obstacle occurred. When I got to filing my return, I got a message to check the State tax paid on each of several Fidelity RMD's, form 1099-R. The error message said, "check box 14b, State Tax Paid". The added text stated". State tax paid cannot be greater than the RMD. " The first observation is there is no box 14b. Secondly, the amount referenced is in box 14, and State tax paid was, $62 and change and the RMD was $1400+. I got the same error message for each of several Fidelity RMD's. All this data was previously deleted and imported a second time from Fidelity . So now I'm stuck at the final step to file. I confirmed the info is correct, but the program keeps stating there's an issue. I'm so frustrated with Turbo Tax this year. I've used the disk version for years without any issues but this year it's been total frustration with the online version.

bflobob

I thought I was doing something wrong but now I’ve learned that TT definitely has a flaw as I have the same issue as described above. I have 3 IRAs and I withdrew less than specified for the first 2 and made up the deficit in the RMD of the 3rd IRA so the total is correct but TT doesn’t want to let me proceed. I’ve read many of the responses and this definitely is a program bug that many have described.
I will try to reach support tomorrow and I will also call Fidelity to notify them of the problem

as they provided the program to customers this year.