Congratulations for all your work to figure this out. I've been trying to get Intuit TurboTax Support to take this issue seriously for over a month now. By the way, I found this issue in TTax after trying FreeTaxUSA.com just to see what it was. I inputted the data from my TTax return to FreeTaxUSA and found they agreed to the dollar. That was a good result. FreeTaxUSA then prompted me to find more ways to save and suggested making an IRA Contribution to partially offset a distribution using Form 8606. I won't go into all the details, but I am convinced TurboTax is not programmed correctly for an IRA Contribution made during the tax year (2020 in this case), the contribution was not made Jan 1, 2021, up to Apr 15, 2021. The Step-by-Step instructions only asks for the contribution made, the date (2020 or 2021). If made in 2020, it does not ask you for the Total Year-End Value of all other IRAs, excluding Roths. To me, it looks like a strategy for the coming year (2021) is to make a contribution to my spouse's IRA in 2021, so that whatever distribution is made in 2020 becomes at least partially non-taxable. The max. contribution is $7000 for 2020, don't know about 2021 yet. If the Dec 31 year-end IRA values are not too large compared to the contribution, some of the distruibution become non-taxable and one can save a few bucks in taxes. But, the way TTax currently works, it ignores the calculation for the percentage of contribution to total year-end value because the Step-by-Step Interview fails to ask the question about year-end values. Hence, TTax gives you a saving of your marginal rate times the full non-deductible contribution. That's wrong, but that's the way it works. And, the Error Check (Review) doesn't flag the error, thus one would just file the taxes as calculated thinking all was correct. Buy Audit Defense for $45 and you're covered. Now that's not right to do, but we'll see whether TurboTax fixes the problem to make it work correctly for 2021.
