Inherited IRA RMD

Forum|Forum|1 year ago
May 18, 2024
1 reply
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HELP!

I took the correct amount of RMD and imported my 1099-R. It correctly lists "4" (Death), yet I am being charged a penalty of $1,885 for a withdrawal of $1,598????

How can I figure out what Turbo Tax has done wrong. I have had this IRA since 2004 and never before have I had an issue with being charged a PENALTY for taking the REQUIRED RMD, calculated by Vanguard, not by ME.

This is obviously a mistake but I can't see where I could have made the mistake, so how do I figure out what TTax did wrong?

Not A Product Question

VolvoGirl

Employee

Try deleting the 1099R and enter it again MANUALLY. That usually clears something out and fixes it. @dmertz

juleyhAuthor

Thanks. I did what you suggested but the problem seems to be there. For Totals Summary it showed Adjustment to Income -$1885, but absolutely no difference in the amount of tax I owed for Federal or State. On the State (CA) Adjustments Schedule there is still $1,885 as Penalty for early withdrawal of "savings" (?) I assumed it was RMD but it didn't change.

Is there something I need to do to trigger an update? Like close it and re-open software? Is there any other "withdrawal of savings" could refer to? I haven't withdrawn anything other than RMD that could possibly be subject to penalty, and it correctly shows that I withdrew ONLY the amount of RMD, no more no less.

rjs

Employee

If you are referring to line 18 in Section C of the CA Adjustments Schedule, "Penalty on early withdrawal of savings," that has nothing to do with your RMD or your 1099-R. It comes from line 18 of Schedule 1 in your federal tax return, which in turn comes from box 2 of a 1099-INT that you entered. The adjustment reduces your federal and California taxable income. It is not a tax penalty. It's a penalty that you paid to the bank that issued the 1099-INT.

(That seems like a rather high penalty. Check and make sure that you entered your 1099-INT forms correctly.)