Has anybody else been totally confused by TurboTax's treatment of 401K distributions?
After I finish entering federal income, TurboTax presents a summary screen: "Here is a Picture of Your 2021 Income".
It is a nice summary except it only shows IRA withdrawals and appears to ignore a retiree's 401 K withdrawals.
For instance, in the following contrived example there was an RMD of $1,500. There are two 2021disbursements and each disbursement had a 1099 R with a "7" in Box 7.
$1,234 withdrawal from the 401k provider.
$266 withdrawal from the IRA provider.
$1,500 Total
But the "Here is a Picture of Your Income" screen, only shows the IRA withdrawal.
Income
Wages and Salaries $0
Partnership, S Corp, etc. $0
IRA Distributions - taxable $266
Pensions - taxable $7,388
Pensions - nontaxable $0
Social Security - taxable $50,000
Social Security – nontaxable $0
Total Income $57,654
Despite this confusion taxes appeared to be calculated correctly.
After 5 hours of my time and 5 phone calls to TurboTax, I finally figured out that the 401k disbursement was being lumped into the Taxable Pension !!! This is not at all obvious.
I am posting this in the hopes that others users may avoid my confusion. (I have already requested that TurboTax modify their software, but that might never happen.)
