@nolanwittrock wrote:
@DoninGA
@macuser_22
Good news bad news!
I discovered the source of the issue. But I don't know how to fix it.
The issue is caused by the interaction between my Covid Withdrawal, which was taken from my Traditional IRA, and my contribution to that same Traditional IRA. I contributed $6,000 to my Trad IRA in 2020 (early in the year, long before I took the Covid Withdrawal).
In TurboTax, I deleted my Trad IRA Contribution in the deductions section. As soon as I did that, the Covid Withdrawal numbers were corrected and it shows that I owe $0 as a taxable distribution on my 1040.
However, as soon as I add back in my $6000 Trad IRA contribution it messes up the Covid Withdrawal numbers again.
This explains where that $92,008 number that I mentioned earlier is coming from. When I put in my Trad IRA contribution, it is subtracting $6,000 from $98,008 (my Covid withdrawal amount) and saying that $92,008 is my taxable amount.
Not sure how to fix this, as I obviously need to report my Trad IRA contribution.
Exactly where are you seeing that tax - 1040 line 4b or your total tax?
If the IRA contribution is adding to your total tax that would indicate that you did not have enough taxable compensation (money that you worked for) to make a contribution and you are getting a penalty for an excess contribution.
An IRA contribution is not related to a 1099-R unless you made it a non-deductible contribution and used it to reduce the taxable amount.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
