@nolanwittrock wrote:
@dmertz
@macuser_22
Sorry if this sounds argumentative.
I've got the Form 8606 issue figured out. My point right now is simply that TurboTax is not including the Covid IRA distribution as part of my AGI because it is not taxable. After making the Form 8606 line 15b correction, my 1040 Line 4a says - IRA distributions $98,008. Line 4b - Taxable amount $0. Line 11 AGI is $122,480. This seems correct to me. IRS guidance states that only the taxable amount of any IRA distributions are included in AGI.
However, when you get to the MAGI calculation on the IRA worksheet, TurboTax adds back in the Covid IRA distribution, making my MAGI $214,527.
If you can point me to IRS guidance stating that a non-taxable IRA distribution needs to be added back in to calculate MAGI, then we will all be on the same page. I have found no such guidance, so I think this MAGI number is wrong, and therefore my Traditional IRA contribution should still be deductible.
And only the taxable amount is added to the 2020 AGI. The entire distribution is taxable but the CARES act allows the payments to be deferred to future years. I do not think this is addressed in any IRS publication but probably is in revenue rulings. (Noticeably IRS notice 2005-92)
**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.**
