PSA: RMD and TT Entry

[TheWizard]

I use FreeTaxUSA, not TurboTax.
I've never had to enter the computed RMD numbers for either my 403(b) or my tIRA.
TurboTax is just making things difficult by doing this.
Perhaps they are doing this so they can compute your penalty if you under withdrew.

What's more important for your custodian is keeping track of your RMD status during each year, telling you how much more you need to withdraw before 12/31.
Vanguard does a good job with this for my tIRA...

 

[Souschef]

Both Fido and T Rowe keep track of this for me. I also check it against my RMD spreadsheet to verify my calculations.

 

[Dalton]

It wouldn't surprise me if adding this to the tax softwares isn't to force people to look at the relevant documents in an effort to increase compliance, since they made the changes to the RMD rules (changed the start ages and also the inherited IRA 10 year payout stuff/confusion), and then threw in the years of RMD exemption for covid, and on top of all that, they changed the penalty rates.

 

[Original Wally]

Each Jan I start a tax file for the next year [I have already started one for 2026].

When things like the 5498 come in, I just drop them in the file.

 

[marko]

Coincidentally, just yesterday I received an email from TRowe that they were legally required by the IRS to notify me (and the IRS) of, and calculate this year's RMD.

What I do with that information is up to me.

 

[Koolau]

Yes, they tell me what I owe at the start of the year, but I was expecting them to record that number somewhere so that I'd have it 14 months later without having to dig.

If they're not recording it, they're not reporting it so it has sort of an honor system feel doesn't it?

My understanding was that they reported it to IRS. Are you certain they're not reporting??

 

[Koolau]

Each Jan I start a tax file for the next year [I have already started one for 2026].

When things like the 5498 come in, I just drop them in the file.

Yep. Got one for several years back.

 

[Dtail]

Fidelity has the RMD information online and also states whether you already took the RMD.

 

[marko]

My understanding was that they reported it to IRS. Are you certain they're not reporting??

From what I can tell, they report the IRA balance but not the amount of the RMD required. If they had reported the amount due, I'd expect that they'd either put it on my 1099R or at least have it easily available.

 

[Original Wally]

Yep. Got one for several years back.

I have my tax returns & supporting documents back to when DW Molly & I were married - 1973.

 

[CalBird]

From what I can tell, they report the IRA balance but not the amount of the RMD required. If they had reported the amount due, I'd expect that they'd either put it on my 1099R or at least have it easily available.

My assumption is the brokerage company wouldn’t know if you have other IRA with other brokerage companies so they couldn’t provide you the RMD, as the RMD is based on your total IRA/401k balance.

 

[Sunset]

My assumption is the brokerage company wouldn’t know if you have other IRA with other brokerage companies so they couldn’t provide you the RMD, as the RMD is based on your total IRA/401k balance.

Yes, they only tell you what they know from their perspective. I bet a few people miss the correct amount when it's spread over multiple IRA's and 401K's.

 

[camfused]

Refresh my memory please. The yearly RMD is the amount across all your taxable IRAs, and you are free to take it all from just one, if you want, right?

 

[jebmke]

Refresh my memory please. The yearly RMD is the amount across all your taxable IRAs, and you are free to take it all from just one, if you want, right?

That is correct. You cannot do it across Traditional and Inherited IRA though.

 

[Dalton]

If each brokerage house is required to report the calculated RMD for the balance you hold with them (as suggested may be the case, above), then the total of all your IRA/401k account RMDs should be the correct amount.

 

[Golden sunsets]

Some time ago I downloaded the RMD table and put it in a spreadsheet. All I have to do every year is enter the year end numbers and the spreadsheet calculates the RMD.

Ditto!

 

[jebmke]

I would not use software that required me to enter the value of the RMD. It isn't needed for filing a tax return. That's what I want the software to focus on, nothing else.

 

[levindb]

I would not use software that required me to enter the value of the RMD. It isn't needed for filing a tax return. That's what I want the software to focus on, nothing else.

For those people age 73 in 2025, they are required to withdraw their first RMD by April 1, 2026. TurboTax can alert these people if the software has the RMD information, and then alert them to the ability to avoid the tax penalty if they complete their tax return before April 1. To me, it seems like a useful feature especially for those people who have never experienced RMDs in the past.

 

[jebmke]

For those people age 73 in 2025, they are required to withdraw their first RMD by April 1, 2026. TurboTax can alert these people if the software has the RMD information, and then alert them to the ability to avoid the tax penalty if they complete their tax return before April 1. To me, it seems like a useful feature especially for those people who have never experienced RMDs in the past.

I have no problem having an alert. But having it a requirement of the software is not acceptable.

 

[marko]

I have no problem having an alert. But having it a requirement of the software is not acceptable.

You might have trouble finding tax software that doesn't ask this.

A quick search says that TT, H&R Block, Tax Act and Efile all require this question in order to insure that you've withdrawn enough to satisfy the requirement. For your own protection, I'd say.

I'd presume that any other product would do the same. I'd also expect any reputable tax accountant to do the same in a face to face interview.

Good luck.

 

[TheWizard]

You might have trouble finding tax software that doesn't ask this.

A quick search says that TT, H&R Block, Tax Act and Efile all require this question in order to insure that you've withdrawn enough to satisfy the requirement. For your own protection, I'd say.

I'd presume that any other product would do the same. I'd also expect any reputable tax accountant to do the same in a face to face interview.

Good luck.

I haven't finished my FreeTaxUSA return for 2025 yet. I'll try to report back on this after I do...

 

[audreyh1]

I suppose TT is just triggering off ages for the RMD entry?

At least that 70.5 age business is no more. That was annoying.

 

[jebmke]

You might have trouble finding tax software that doesn't ask this.

A quick search says that TT, H&R Block, Tax Act and Efile all require this question in order to insure that you've withdrawn enough to satisfy the requirement. For your own protection, I'd say.

I'd presume that any other product would do the same. I'd also expect any reputable tax accountant to do the same in a face to face interview.

Good luck.

I have used TaxSlayer Pro for years with taxpayers -- some over 100 years old -- and this has never come up in the software.

 

[marko]

I have used TaxSlayer Pro for years with taxpayers -- some over 100 years old -- and this has never come up in the software.

Then I'd use TaxSlayer if I were you. Seems to be your best option.

According to TT, this is a new IRS requirement for this year. I'm hoping for your sake that your software is unaware of this change.

 

[jebmke]

Then I'd use TaxSlayer if I were you. Seems to be your best option.

According to TT, this is a new IRS requirement for this year. I'm hoping for your sake that your software is unaware of this new regulation. .

did they cite the regs? I find that non-IRS sources for tax information are frequently wrong; search and AI are the worst - total garbage for tax information. But I should check when I start in production.

Unless they rolled it out since I certified earlier this month it is not there. But software is frequently riddled with errors so that may not be a fair test. They also roll alot of fixes throughout the year. Typically tax software isn't stable until March. One of the issues is that our clients don't bring paperwork with which we could verify this anyway so it may be that software for the industry is not going to insert this. May also be that the reg got punted like the QCD reporting reg. With the clowns currently in the IRS one will never know.

I don't do RMDs until '26 so not a current issue. Who knows, by then I may finally decide to hire an accounting firm so I have some run time with them and get comfortable they can handle it on behalf of my spouse if I croak.