I made a QCD of $7,750. My filed 1040, line 4a listed $55,245 and a taxable amount of $54,751. It seems as if the posted "QCD" is contained under the social security benefit. Line 5a is: $43,596 and the taxable amount of $37,057. The difference of which is beyond the Part B deductions and less than my QCD. So, I don't know how to resolve this issue and my return has been filed.
PS: I further confused as follows: 4a is entitled, "IRAs, pensions and annuities". My IRA as posted above of $55,245 does not reflect my pension of $7256. Seemingly, the total for 4a would be $62501 and the taxable amount is less my QCD.
HELP!!
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Actually, I think everything is ok. First, let's talk about Line 4a. Ignore it (I know, it is difficult to do so). In creating the simplified (?) Form 1040, the IRS collapsed two lines into one, and issued unclear instructions how to report pensions and IRA distributions. Turbotax has chosen an implementation, approved by the IRS, that does not include the pension amount in the Line 4a amount (it would include, say, an IRA withdrawal). Thus, it is $62,501 - $7,256 = $55,245, which is the amount reported by Turbotax. Also, $62,501 - $7,750 (QCD) = $54,751 which is the taxable amount shown by Turbotax.
To summarize, the total of all your distributions from qualified retirement plans is $62,501. All but the pension amount is shown on Line 4a. All but the QCD amount is shown on line 4b, which is the amount on which you are paying tax. So you are not paying tax on the QCD, as desired.
The social security benefit calculation is also correct. At your income level, 85% of your social security benefit is taxable. 85% of $43,596 is $37,057 as shown.
Actually, I think everything is ok. First, let's talk about Line 4a. Ignore it (I know, it is difficult to do so). In creating the simplified (?) Form 1040, the IRS collapsed two lines into one, and issued unclear instructions how to report pensions and IRA distributions. Turbotax has chosen an implementation, approved by the IRS, that does not include the pension amount in the Line 4a amount (it would include, say, an IRA withdrawal). Thus, it is $62,501 - $7,256 = $55,245, which is the amount reported by Turbotax. Also, $62,501 - $7,750 (QCD) = $54,751 which is the taxable amount shown by Turbotax.
To summarize, the total of all your distributions from qualified retirement plans is $62,501. All but the pension amount is shown on Line 4a. All but the QCD amount is shown on line 4b, which is the amount on which you are paying tax. So you are not paying tax on the QCD, as desired.
The social security benefit calculation is also correct. At your income level, 85% of your social security benefit is taxable. 85% of $43,596 is $37,057 as shown.
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