Philly12
New Member

Retirement tax questions

First, enter everything exactly as reported on your Vanguard 1099-R form.  After that, TT will explain about the CARES Act and ask if this was a RMD.  Since you did a reversal, TT explains that you should answer "No", it was not a RMD.  Then, TT does a great job of asking a series of questions regarding how much you reversed.  Did you return all of it, including the tax owed?  If so, you owe no taxes, and the amount of tax already withheld will be applied to this year's tax return.  Did you return a portion of it?  If so, how much? In your exemplar, $50,000 was the taxable amount -$9,000, the tax withheld = $41,000 distributed. You returned $41,000, the distributed amount,  plus $4,000 of the $9,000 taxes that were withheld.  You will only owe tax on the $5,000 that you did not return.  The $9,000 in taxes that was withheld has already been sent to the government and will be used to pay the taxes on the $5000 you did not reverse and this year's taxes.  You'll probably get a hefty refund.