Question

Inherited IRA 2022 RMD not taken until 2023

Forum|Forum|3 years ago
April 1, 2023
1 reply
0 views

Vanguard failed to take the 2022 RMD on an inherited IRA in 2022 and stated that form 5329 needs to be filed. Other posts state that TurboTax should recognize that an RMD needs to be filed and should add it to the return.

1) How and when does this happen?

In turbotax home and business you either have to enter information for a 1099-R or it asks to delete the 1099-R. Whether I go thru the 1099-R information entry process and do not enter an amount or enter zero or ignore the 1099-R (click continue when it prompts to go back and enter or to delete), there is no conversation for form 5329 and I do not see it added to the return.

2) Vanguard took the 2022 RMD in 2023. How should this need to be handled in turbotax next year?

TurboTax Home & Biz Windows

M

meppemAuthor

In case someone with the same question stumbles across this post.

After much searching, I found a post with instructions for how to add the form 5329 to the return outside of the step by step. The key (I think) was to first delete the 1099-R that was imported from the previous year return and then to follow the steps given to add the form 5329 as follows:

**************************

Unfortunately this can only be done using the "forms" mode that is only available with the
desktop software if you do not have a 1099-R to file. If you are using the CD/download
version:

Enter the forms mode and click on open form. Type in 5329. Choose 5329-T for the taxpayer
(first person listed on your tax return), or 5329-S (for spouse - 2nd person on tax return).

Scroll down to Part IX line 52 and enter the RMD amount that should have been taken.
On line 53 enter the amount of the RMD that was actually taken (probably zero if it was
missed).

Then in the box right under line 53 "Waver of Tax Smart Worksheet" enter the same amount as
line 52 (the RMD amount). Then click the "Explanation" button and enter the reason for
missing the RMD and your statement requesting a waver.

You will not pay any penalty now until the IRS determines if it will grant the waver,
then they will inform you if you owe the penalty.

**************************

I suppose that I will get 2 1099-R forms for 2023 (one for the 2022 RMD) and will have to figure out how to deal with that next spring.

D

DanaB27

Yes, if you didn't receive a Form 1099-R then you will have to enter Form 5329 in Forms Mode as you described. You request a waiver of the penalty if you have reasonable cause. Please see Relief for Reasonable Cause for additional information.

Yes, you will have two RMDs to report on your 2023 tax return since you took two distributions in 2023. You will receive 2023 Form 1099-R in 2024, and enter this in TurboTax and indicate in the follow-up questions that this was your RMD.

@meppem

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"