@69VanNuys wrote:
Thank you for confirming the error. I believe you are correct that the software is using Table 1-1, which works only if Line 4 of Form 8606 is ZERO. That is, if no contribution was made between January 1, 2021 and April 15, 2021. Turbo tax is not running the calculation through the entire Form 8606 calculation and it results in a calculation error.
As user @dmertz pointed out - there is no error. TurboTax is using the IRS worksheet 1-1 on Pub 590.B.
You will find the TurboTax calculations on the "Taxable IRA Distribution Worksheet" in TurboTax.
That IRS worksheet says to enter ALL contributions, including any made for the prior year before the due date and add them together which is what TurboTax does.
We agree that the IRS worksheet seems to conflict with the 8606 instructions and will include the prior years contribution in the calculations which results in a lower tax then the 8606 calculations do, but that is what the IRS says to do and it seem that most tax software have started to use the worksheet instead of then 8606 because of the better tax treatment.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
