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Employee

Question

RMD taken correctly, but penalty assessed

Forum|Forum|1 year ago
February 22, 2025
8 replies
0 views

I have 2 IRAs. I took my full required RMD (approx. $15K) from my first IRA; and I took more than my full required RMD from my second IRA (the account had only $17 so I took the full amt and closed out the account). I completed my return on TT Premium about 10 days ago and all looked good (taxes calculated correctly) but I didn't submit to IRS. I signed in today to find that my taxes owed had INCREASED by over $3K! I noticed that TT had assessed an RMD penalty! The questions changed and it now asks what I took for my RMD and if this was my full required RMD, to which I answered "yes" (for both IRAs), but then it proceeds to ask me questions about a "correction window" and then assesses a penalty. THIS IS INCORRECT: I took my full RMD as required for both accounts, and TT was calculating all of this correctly 10 days ago. WHAT HAPPENED??!! The only way to get TT to calculate the correct tax is to say that my required RMD was $0, which is incorrect, and I don't want to submit incorrect backup pages even though my tax liability would be accurate. HELP PLEASE! I am using TT PREMIUM through Fidelity Investments.

TurboTax Premier Online

SPQ

I had the same unpleasant surprise, and posted an inquiry yesterday asking how to fix this problem. More than 36 hours later I still have no response from TT.

fanfare

Employee

accoring to one taxpayer the recent update changed the RMD interview to correct problems.

Perhaps there are new issues with that "solution".

@SPQ

@arusso03

arusso03Author

Employee

Yes - that's clearly what must have happened (a "fix" to another RMD issue produced a new problem).

No response or update yet from TT. This is such an obvious error, you'd think they would be able to sort it out quickly.

TerriLa

Having the same problem. It is saying I owe a 10% penalty on my RMD. Somehow, the newest update, by following the questions, is adding my RMD twice and penalizing me on the extra amount. They need to get this fixed ASAP.

arusso03Author

Employee

I believe the issue has been corrected. I posted the original post but went back online on Thursday (Feb 27) and it was now showing the correct taxes owed (no penalty). I revisited the RMD section and answered the questions again and all looked good — so fingers crossed.

TerriLa

Hasn’t been fixed for me. I just opened mine today to double check everything. Had an update and that is when mine messed up. I filled in the info from my 1099. The gross distribution is my full RMD. But it is charging me a 10% penalty on the same amount. It doubled my RMD and says I only took out half. I called Turbo Tax. Was on the phone for quite some time. Finally he said he was sending it to IT because it has to be a software problem.

taxfun01

I am in the exact same situation. Do we just continue to wait for a fix? I was able to remove the D from the code box and answer a few more questions. TT accepted it that way and ready to submit. I haven’t yet because it’s not correct. Thoughts?

robinson1025

Still not fixed as of March 31.

DanaB27

It would be helpful to have a TurboTax ".tax2024" file that is experiencing this issue. You can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions for TurboTax Online:

From the left menu select Tax Tools.
Then select Tools below Tax Tools.
A window will pop up which says Tools Center.
On this screen, select Share my file with Agent.
You will see a message explaining what the diagnostic copy is. Click okay through this screen and then you will get a Token number.
Reply to this thread with your Token number and add @DanaB27 . This will allow us to open a copy of your return without seeing any personal information.

The instructions for TurboTax Download:

On your menu bar at the very top, click "Online"
Select "Send Tax File to Agent"
Click "Send"
The pop-up will have a token number
Reply to this thread with your Token number and add @DanaB27 . This will allow us to open a copy of your return without seeing any personal information.

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

@robinson1025

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

TBGrant

Same experience here. Never had any issue re. RMD in previous RMD years, now hammered with penalties for NO APPARENT REASON!!! I have used the AARP calculator and the amounts come out to within 1 cent of the actual RMD amount. What on earth is going on here? It would be ~~nice~~ necessary to hear from Intuit on this issue. VERY DISTRESSING!!!

robinson1025

I HAVE THE SAME PROBLEM…WHAT IS GOING ON. I am using TURBO TAX PREMIER.

Mad cuban

This is what is happening to me. By mistake I had the amount of RMD taken out twice. But, it’s telling me I didn’t pay it completely and it’s penalizing me over $800! What is wrong with your calculations? My 1099specifically says it was paid in full, however you say I did not. I’m not willing to pay your exorbitant prices in order to talk to someone that probably knows less than I do about taxes! Also I’m over the amount where I am exempted from taxes and you are charging me a 29% rate, what’s up with that! I am 77 years old in retirement and have been filing with Turbo Tax for many years but something is very wrong this year.

skelly11

I am a TurboTax Tax Expert. I just had a client with this same issue.

The IRS recently put out an update and something is not flowing with code D in box 7. If you have anything else in box 7 like a 7 omit the code D. Also make sure all 1099Rs are listed as "qualified" in the follow up questions.

Only put the amount of RMD for that 1099R in the RMD entry box. A

At the end make sure you choose "None of the accounts failed to take the RMD" - its the bottom option.

robinson1025

Thank you I am now OKAY.

ssmith777

Just wanted to share an RMD error loop that I had with a cx. Cx had two inherited Retirement accounts were both account distributed RMD to her every November. The software didn't allow one of them the question of whether or not an RMD was taken. It will loop an error for cx to take the RMD during the corrective window an access an error. Here is the fix : Please go thru Federal Review first --> Errors below (1) Did you withdraw RMD during correction box? Let's answer Yes here (need to go back to change after answering #2)
2) Entire gross applied to 12/31/24 RMD: YES
3) #1 error will re-appear. And we need to say NO
After this, it should clear errors away