Deductions & credits

The total value of your IRAs is needed because you took a distribution (your Required Minimum Distribution) from your account and the Form 1099-R probably indicates that the 'taxable amount cannot be determined' or you indicated that there had been non-deductible contributions to the IRA in the past.

If any of your IRA accounts have a mixture of pre-tax and after-tax money (or deductible and non-deductible contributions), then every distribution from any of your IRAs is deemed to be a mixture of pre-tax and after-tax money.  Therefore, the total value is needed to determine what portion of the distribution is taxable.  

Entering the year-end balance allows TurboTax to do a correct calculation of the nontaxable and taxable amounts of the traditional IRA distribution that was reported on the Form 1099-R.  Without the entry of the year-end value, the calculation result is erroneous because TurboTax assumes a zero year-end balance in the absence of the entry.  The correct calculation reduces the erroneously high refund amount or the erroneously low balance due with your tax return.

You can see the calculations on Form 8606 Part I.

"Enter your nondeductible contributions to traditional IRAs for 2022, including those made for 2022 from January 1, 2023, through April 18, 2023."

You can Preview your Form 1040, prior to filing to check these entries as follows:

You can view your entire return or just your 1040 form before you e-file ion TurboTax Online:

1. Sign in to your TurboTax account
2. Open or continue your return
3. Select Tax Tools from the menu (if you don't see this, select the menu icon in the upper-left corner)
4. With the Tax Tools menu open, you can then:
   • Preview your entire return: Select Print Center and then Print, save or preview this year's return (you may be asked to register or pay first)
   • View only your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu

You can preview your return in the TurboTax CD/Download software by following these steps:

1. With your return open in TurboTax, select Preview from the File menu at the top. (If you don't see "Preview," open your return, not just the program).
2. In the pop-up window, choose the set of forms you wish to see (all official forms, specific forms, etc.) and select Preview.
3. Scroll down to view all the forms if you chose to preview multiple forms.

To enter your Form 1099-R for your RMD you should have:

Go to Federal Taxes,
Wages & Income
(I'll choose what I work on - if that screen comes up)
Retirement Plans & Social Security
IRA, 401(k), Pension Plan Withdrawals (1099-R)

OR  Use the "Tools" menu (if online version left side) and then "Search Topics" for "1099-R" which will take you to the same place.

When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.

Click here for additional information on RMD's.