Turbotax

L1: TurbotaxHello-Tax time and I am thinking of using TurboTax? Does anyone know if this program is form 5329 friendly? Also on Form 1040-I rolled over a pension so line 16a (the amount) and line 16b.(the taxable amount-the 72t withdrawel calculation? Then of course on to Form 5329-what then? Thanks so much
Nelson61712007-01-10 17:24, By: Nelson6171, IP: [64.12.117.8]

L2: TurbotaxI had a falling out with Turbotax a few years ago and have been using TaxCut for the last several years. It handled my 5329 without problem last year but I didn”t have the additional complexity the original poster mentioned.
More generally, TaxCut has worked well for me in all situations, enough so that I haven”t felt the need to re-examine Turbotax.2007-01-10 18:10, By: John, IP: [71.208.232.16]

L2: TurbotaxI had used Turbotax for years. Then a few years ago they wouldn”t let me move from one computer to another–imagine getting a new computer, or using my wife”s! So I switched to TaxCut and have been happy.2007-01-10 18:42, By: ted, IP: [141.154.28.96]

L2: TurbotaxThose issues are very basic and Turbo tax should not present a problem.
I think from your post that you did a standard employer plan rollover to an IRA and then initiated the 72t from the IRA. In that case, line 16 will only contain the employer plan distribution and rollover. Line 15 will show the 72t IRA distributions, from which if you don”t get the 1099R exception coding (2), just initiate the 5329 to claim the exception.2007-01-10 20:51, By: Alan S., IP: [24.116.66.98]

L2: TurbotaxThose issues are very basic and Turbo tax should not present a problem.
I think from your post that you did a standard employer plan rollover to an IRA and then initiated the 72t from the IRA. In that case, line 16 will only contain the employer plan distribution and rollover. Line 15 will show the 72t IRA distributions, from which if you don”t get the 1099R exception coding (2), just initiate the 5329 to claim the exception.2007-01-10 20:51, By: Alan S., IP: [24.116.66.98]

L2: TurbotaxThose issues are very basic and Turbo tax should not present a problem.
I think from your post that you did a standard employer plan rollover to an IRA and then initiated the 72t from the IRA. In that case, line 16 will only contain the employer plan distribution and rollover. Line 15 will show the 72t IRA distributions, from which if you don”t get the 1099R exception coding (2), just initiate the 5329 to claim the exception.2007-01-10 20:52, By: Alan S., IP: [24.116.66.98]

L2: TurbotaxTurbo Tax vs Tax Cut: I began using Tax Cut many years ago and then switched to Turbo Tax with better results. Then one year I tried Tax Cut again, was very disappointed and switched back to Turbo Tax the next year and that”s going to be my tax platform from now on. I found Turbo Tax a “smarter” program to operate than Tax Cut. The problem of only using Turbo Tax on one computer at a time was a one-year issue. The complaints were heard loud and clear so that problem has resolved itself. Don”t think manufaturers are deaf to complaints … well most of the time. My complaint is the price charged by Turbo Tax for annual renewal. I would like a lower price instead of the “free” programs they try to give you. My work around to this problem is to buy a new copy at Sam”s Club each year and save $20 plus. I don”t care if they have me registered for a gazillion copies of their program.
Now to the original question. Whether you use Turbo Tax or Tax Cut, the program should handle your situation. All you have to do is be sure you follow theinterview and input the data correctly from the 1099-R documents you receive. Don”t make up inputs. For example, if you did a “trustee-to-trustee” transfer from your company pension plan to an IRA, then you don”t have to report anything because you didn”t get a 1099-R. Don”t get creative and try to report this. On the other hand, if you had the pension plan distributed directly to you,less the mandatory 20% Federal tax withholding, then you got a 1099-R showing the total distribution and the amount withheld. If you completed a rollover to an IRA within 60 days of receipt of the funds, and if you did not make up the 20% withheld from other sources of funds, then you have to report this withholding (20%) amount as a taxable distribution, which may or may not be subject to early withdrawal penalty, depending on your age. Whatever the situation, the tax programs should handle everything, if you input the data correctly.
Good luck.
Jim2007-01-11 07:25, By: Jim, IP: [70.184.2.72]

L2: TurbotaxThanks for the replies-Alan you said line 15-ok-it was a rollover of a defined pension to an IRA withVanguard-I am trying to imagine how the flow will be on TurboTax once I start inputting information. When I am inputting the 1099 it will probably ask for the code-how do I let it know code is wrong to retrieve the 5329? Thanks, N2007-01-11 09:31, By: nelson6171, IP: [204.87.68.252]

L2: TurbotaxNelson,
You first had a DB pension lump sum transferred to Vanguard TIRA – you should get a 1099R coded G for direct rollover. This has to be reported because it came from an employer plan, not an IRA. These are rarely wrong. You would just enter the gross amount into the pension distribution portion of the TT inquiry and indicate the entire amount was rolled over. This should produce a figure on 16a and -0- on 16b with “Rollover” shown next to 16b.
Next step is the one that typically creates the need for a 5329. If you start a 72t from the IRA (or combination of IRA accounts), IRA custodians are becoming reluctant to acknowledge the validity of your 72t and they issue a “1” code on the 1099R instead of a “2” for the exception. That triggers the need for the 5329, but I have not used TT recently, so I cannot alert you to exactly where you get to override the incorrect “1” coding. But it has to be there, or people would be screaming about it. Again, the 5329 would not be needed for the direct transfer to the IRA, only for the IRA distribution on line 15 if the 1099R coding is wrong. If it”s correct, then no need for the 5329 at all. 2007-01-11 15:38, By: Alan S., IP: [24.116.66.98]

L3: TurbotaxThanks Alan! I think I got it-line 16 would be the pension rollover to VG with (0) on line 16b and line 15a and 15b would be the amount I withdrew from the IRA (pursant to 72t election) sound right? Taxable amount would be the entire yearly distribution, correct! Hopefully when it asks for the code then I will get a prompt for 5329. Thanks, N2007-01-12 12:33, By: Nelson6171, IP: [64.12.117.8]