- I am helping a relative with their (assumed it would be) simple tax returns.
- This relative rolled over an inherited IRA in 2024 and I entered the 1099-R as required.
- Only income is Inherited IRA distribution of ~$17k; financial institution that rolled over the account calculated and sent this amount. This ~$17k is reflected on a separate 1099-R which I entered into TT as required. There were taxes withheld on this of $480 which I also entered.
- After the standard deduction, the taxable income is $1194.
Blended tax rate is shown as 381.5% by TT with Tax Liability of $4,555.
I had a similar situation on my taxes but did not end up with an outrageous tax rate.
The TT expert I spoke to yesterday sent me links to a few articles on the subject, but they did not provide any clarity for me. Have already cleared all entries and re-entered, but received the same shocking result.
