How to enter an RMD shortfall in ProSeries

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 VIII. The program calculates the tax at fifty percent and carries it to Form 1040, page 2.

To enter required minimum distributions:

1. Press F6 to bring up Open Forms.
2. Type 99R to highlight the 1099-R Wks and press OK to open the 1099-R Worksheet.
3. Enter lines 1-19 from the 1099-R you recieved.
4. Scroll down to the RMD section.
5. Check the Entire gross is RMD if the full amount is a required minimum distribution or enter the amount that is a RMD.
6. Press F6 to bring up Open Forms.
7. Type 5329 to highlight the 5329-T or select the 5329-S for spouse distributions and press OK to open the 5329.
8. Scroll down to Part IX.
9. Complete lines 52 and 53.

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