Since no expert has responded in 5 hours, I will go ahead and post my thread here and hope for the best. It is Post #4 sent two days ago that I hope to get answered.
POST #! — 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.
ANSWER to Post #1— Marilyn G1 (Employee Tax Expert) replied. — It’s possible that your pension distributions were not taxable in 2023. Without seeing your 1099-R &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.
POST #2 — Asked Community re: possible mistake on 2023 return re: not including pension as taxable income. Expert said try amend 2023 return & re-enter 1099-R. Got stuck on "enter annuity info”. "Enter Annuity Info" asks for "plan cost" "Taxfree Amt previously recovered" etc -- have no idea about any of this & it is a pension I want to amend, not an annuity anyway - so I gave up trying to amend the 1099-R on the 2023 return. What else can I do? BTW in case it matters, on the 1099-R the 2a box is blank & 2b is checked & the Expert was MarilynG1
POST #3. —- tried what Turbotax expert advised and failed MarilynG1 suggested I try to amend my 2023 return & re-enter my 1099-R info to see if numbers changed in order to see if Turbotax made a mistake in not including my pension income as taxable. I tried to do this 2 different ways. The first time, I never got to a place where the original & amended versions were compared. I just kept being asked to submit the same info over &over. The second time, I was asked many questions so i thought this would work.T hen I got to a page that asked questions like "plan cost" etc as if I was amending my 401k rather than my pension, so I got stuck. In case it matters, my 2a is blank ad 2b is checked. Any more suggestions? last updated January 29, 2025 3:01 PM
ANSWER to Post #3 ----MarilynG1 — Employee Tax Expert
It sounds like you didn't go through the Amendment Process correctly. Here's info and a video on How to Amend a Tax Return. Be sure to make a copy of your originally filed return first. TurboTax does not compare your original/amended returns. When you Amend, you are add or subtracting info that was not on the original return. Form 1040X will display in Column B the amount of change to a particular line (in your case, Line 1, Income and Deductions) and Column C shows the corrected amount. You then add an explanation of what you changed, and why (for example, 'correct 1099-R entry'). If your 1099-R has Box 2a (Taxable Amount) blank, but Box 2b has 'Taxable Amount is not Determined' do you also have an amount in Box 5? The Code in Box 7 is important, too. Be sure to pay close attention to the follow-up questions after your entry. Generally, pension income is taxable income, however: If no after-tax contributions were made to the pension plan before distribution, the entire amount is generally included in taxable income. However, in cases where after-tax contributions were made to an annuity or pension, only a portion of the distribution will usually be taxed. Here's more info on Pension Income and a detailed article on Form 1099-R.
POST #4 ebtz — Returning Member
I read all the links you provided and tried to do an amendment again and failed. I think the problem may be that I did my 2023 return on my desktop computer which I don't have access to for now. I gather that my amendment needs to be done on a 2023 version. Am working on my laptop and can't figure out how to pull up my original 2023 version there. The many times I've tried to do an amendment, I don't get asked any questions except for providing the reason for the amendment and I get asked that very same same question over and over and can't proceed further. Maybe its because I'm not working from my original return?? I clicked on a 2023 button my my Turbotax site but maybe that does not give me access. Who knows? Any ideas? BTW in case it matters, the important code you mentioned for box 7 on the 1099-R shows a 7 on my 2023 1099-R and the box 5 is blank.
