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My IRA administrator made an incorrect RMD. We returned the incorrect portion without cashing the check. We have a 1099-R with the incorrect, double amount. Suggestions?

Forum|Forum|7 years ago
June 1, 2019
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We received a double RMD instead of a single RMD. We returned the second RMD without cashing it. Fidelity is calling this a rollover, instead of their mistake. How do we avoid the higher tax?

Best answer by dmertz

Unless this was a distribution from an inherited IRA, you avoid taxation by reporting as a rollover the amount that you returned to the account. Enter the Form 1099-R exactly as received under Wages & Income (or Personal Income) -> Retirement Plans and Social Security -> IRA, 401(k), Pension Plan Withdrawals (1099-R). In the questions that follow, indicate the actual amount that was RMD, then indicate that you moved some or all of the money to another retirement account (or returned it to the same account) and indicate the amount that was returned to the account. TurboTax will exclude from the taxable amount on Form 1040 line 4b the amount rolled over and will include the word ROLLOVER next to the line.

D

dmertzAnswer

Employee

Unless this was a distribution from an inherited IRA, you avoid taxation by reporting as a rollover the amount that you returned to the account. Enter the Form 1099-R exactly as received under Wages & Income (or Personal Income) -> Retirement Plans and Social Security -> IRA, 401(k), Pension Plan Withdrawals (1099-R). In the questions that follow, indicate the actual amount that was RMD, then indicate that you moved some or all of the money to another retirement account (or returned it to the same account) and indicate the amount that was returned to the account. TurboTax will exclude from the taxable amount on Form 1040 line 4b the amount rolled over and will include the word ROLLOVER next to the line.