How to enter an RMD shortfall in Lacerte

This article will help you calculate the additional tax on Form 5329 if your client took a distribution from their plan that was less than the minimum required amount.

Before you start:

The rules for required minimum distributions changed under the SECURE Act. Generally, your client may be subject to RMDs starting the April after the year in which they reach age 72 or age 73, depending on their birthdate. Review the IRS guidance for determining if and when your client's IRA or retirement plan will be subject to RMDs.

Enter the excess accumulation information for Form 5329, Part IX. The program calculates the tax at fifty percent and carries it to Form 1040, page 2.

To enter required minimum distributions:

1. Go to Screen 41.1 Retirement Plan Taxes (5329).
2. Scroll down to the Excess Accumulation in Plan section.
3. Enter the appropriate Minimum required distribution for 20YY.
4. Enter any other information that applies.

The program will calculate the tax on Form 5329, part IX, and carry it to Form 1040.