My IRA provider mistakenly withdrew insuffient funds in 2023 and has issued a letter describing the situation. How can I enter this letter with my Turbotax filing?

Forum|Forum|2 years ago
January 31, 2024
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TurboTax Online

Best answer by dmertz

Do you mean that you were required to take an RMD and the IRA provider failed to make that distribution? In that case you must complete the late RMD and file Form 5329 Part IX requesting a waiver of the excess-accumulation penalty. 2023 TurboTax will allow you to do this when in the 1099-R section you indicate that you did not complete all of the distributions you were required to make in 2023.

Cynthiad66

Here is how to upload documents:

To upload something to My Docs™, follow these steps:

Sign in to your TurboTax account. If you're already signed in, select Documents on the left menu.
Select your desired tax year.
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Use this link for additional information: How to Upload to My Docs

If you are referring to RMDs, if an account owner fails to withdraw the full amount of the RMD by the due date, the amount not withdrawn is subject to a 50% excise tax. SECURE 2.0 Act drops the excise tax rate to 25%; possibly 10% if the RMD is timely corrected within two years. The account owner should file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, with their federal tax return for the year in which the full amount of the RMD was required, but not taken.

See full FAQ by the IRS: Required RMDs - IRS FAQ

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VolvoGirl

Employee

But My Docs will not be attached to your tax return. If you efile you can't attach any extra documents or letters. Even if you mail your return they won't read or enter them either. @dmertz

dmertz

Employee

I don't understand what is meant by, "My IRA provider mistakenly withdrew insuffient funds." Was there a distribution reported on a Form 1099-R? If so, what is the code in box 7 of the Form 1099-R?