i have turbotax business and home 2024. ira withdrawals not available until january, how do i simulate RMDs before then to see tax consequence of taking more than RMD?

Forum|Forum|1 year ago
December 12, 2024
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I know my RMD for 2024 but want to simulate tax consequences for larger RMD, but forms not available until 1/11/25, so wondering where else I might put the distribution to simulate this?

dmertz

Employee

You can enter the expected Form 1099-R in forms mode of the download version of TurboTax.

psyadamAuthor

I entered the amount on line 2A of the 1099R IRA distribution form but it didn't change anything on my taxes so don't believe it was effective. Could it be waiting for the update in January to be active? Or is there something else I need to fill in on the form? It's pre-populated with brokerage info from previous years RMD

fanfare

Employee

Since RMD is ordinary income, enter it as other income or interest income. The tax will be the same,

unless your IRA has a basis.

@psyadam

Opus 17

Employee

Point of clarification: RMD is the required minimum you must withdraw. It is not a specific transaction. For example, if your RMD is $5000, that can be satisfied by a single withdrawal of $5000 on December 23, but it would also be satisfied if you withdrew $500 per month over 12 months for living expenses.

You can't withdraw a "larger" RMD. You can withdraw more money (for any reason), but the required minimum portion doesn't change. It would just mean that part of your withdrawal was the required minimum amount, and part was an extra optional amount that you decided to withdraw for whatever reason.

dmertz

Employee

The download version of 2024 TurboTax processes the entry just fine. A Form 1099-R for an RMD (a regular distribution) will have the gross-distribution amount in boxes 1 and 2a, box 2b Taxable amount not determined marked, code 7 in box 7 (or code 4 if it's a distribution from an inherited IRA) and the IRA/SEP/SIMPLE box marked. If you have basis in nondeductible traditional IRA contributions, you'll need to enter on the IRA Information Worksheet the expected year-end balance in your traditional IRAs. Properly entered, the gross amount will be included on Form 1040 line 4b.

psyadamAuthor

The 1099R form was prefilled from last year, I entered amount line one and taxable amount 2A and my tax did not increase, so assuming it did not get entered into the system, pending the update in January. I increase the distribution from the RMD of around 40k to 100k and it still didn't increase my tax hit, so assuming it did not enter as I certainly don't have that level of deductions. Open to suggestions on what might not be functioning and if it is on my end versus Turbotax