fanfare: IRS did not send a bill. They sent the remainder of my refund (reduced by 25% because of the stated Social Security calculation error.) The link included in the online explanation indicates a worksheet to be used to calculate taxable SS 'unless you contributed to a traditional ira and are included in a retirement plan at work'. this is from pub 915.
Perhaps the traditional IRA is what caused IRS to recalculate taxable portion (assuming this is the issue), however this doesn't explain why TT didn't use the correct form to begin with.
I tried going into my already filed 1040 and removed the Traditional IRA contribution. My refund immediately dropped by about 50%. TT already considered it non-deductible, and excess, so why this happened makes no sense to me.
This is really confusing. Will I have to try redoing the taxable SS form, see if it is different than the one TT filed and amend it? Or do I just let IRS know that Traditional IRA was never sent in, and the forms 5329 and 8606 are removed, then let them redo the SS form, refund the 6% penalty tax, and recalculate refund?
