2023 mistake

[ebtz]

 I did Turbotax Premium (IRS & CA) for the first time in 2023. A CPA friend looked at the return & told me there was a big mistake. On line 15a (pensions & annuities) both my pension & 401K were included but 15b (taxable amount), only my 401K was included for some reason by the Turbotax program. My CPA friend says that pensions are taxable too & IRS will probably catch it sometime this year & send me a letter asking for the unpaid tax & possibly a penalty. I am unsure how to proceed. Do I wait for the IRS letter before I start my 2024 Turbotax return & do an amended 2023 return first? Do I go ahead & do the 2024 return which will obviously be based on the incorrect numbers from last year & force the program to include my pension this time. This would undoubtedly trigger an IRS response even if they were not going to catch it the first time around. I can’t seem to figure out how to contact a “Turbotax expert” to help me.

[MarilynG1]

It's possible that your pension distributions were not taxable in 2023.  Without seeing your 1099-R and return, it would be difficult to know.  Was there a taxable amount in Box 2a of your 1099-R?

If you contributed after-tax dollars to your pension or annuity, your pension payments are partially taxable. You won't pay tax on the part of the payment that represents a return of the after-tax amount you paid. This amount is your investment in the contract and includes the amounts your employer contributed that were taxable to you when contributed.  TurboTax will figure all of this out for you when you enter your 1099-R and answer the follow-up questions in the retirement income interview.  

You can open your 2023 return to Amend and re-enter your 1099-R (paying close attention to the follow-up questions) to see if your return changes.  If so, you can file your amended return and then transfer this info to your 2024 return.

Here's more info on How to Enter Form 1099-R.

TurboTax guarantees their calculations, so if you do receive an IRS letter, here's more info on What to Do if You Get an IRS Notice.

Also, here's how to Contact TurboTax Support.