- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Received 1099R for closed IRA in 2020, but original investment was never deducted.
I opened a 12 month IRA CD in early 2019. The intention was to reduce my tax bill for 2018. However this was a mistake as I was already maxing a 401k, so I got no benefit from the IRA. Once it expired in early 2020 I cashed it in (I'm over 60). Now I have a 1099R that shows I have a distribution for the full amount and therefore I am being taxed as if I had received the benefit a year earlier. How can I file this so that I only pay tax on the small amount of interest I earned, rather than the full amount?
- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Deductions & credits
When you opened the IRA and made a non-deductible contribution, you should have completed and filed Form 8606, Nondeductible IRAs. Then when you make a withdrawal from that IRA in TurboTax, it should trigger Form 8606.
For more information, see the following TurboTax Help Article:
**Mark the post that answers your question by clicking on "Mark as Best Answer"
- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Deductions & credits
Thanks for the reply.
I followed the instructions about 8606, but cannot get TT to generate the form in my return.
I opened the IRA CD for $6000 in Feb 2019 and attempted to apply it to 2018. I remember TT telling me it could not be applied to reduce my 2018 tax. It appears in the worksheet for 2019 but I think it should have generated a 5329(?).
Could it be that I have to resubmit 2018 or 2019?
- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Deductions & credits
If it was nondeductible on your 2018 tax return then you should have Form 8606 on your 2018 tax return.
Please follow these steps to enter your 1099-R and trigger the 8606:
- Click on the Search on the top and type “1099-R”
- Click on “Jump to 1099-R”
- Click "Continue" and enter the information from your 1099-R
- Click "continue" and go through the questions until the "Any nondeductible Contributions to your IRA?" screen and answer "Yes"
- Enter your basis (amount of nondeductible contributions up to 31. Dec. 2019)
**Mark the post that answers your question by clicking on "Mark as Best Answer"
- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Deductions & credits
Just to update, I went through again with your suggestions and also reentered the 1009R. This time the 8606 was generated and reduced the tax to just the small amount of interest I earned.
Thanks