My wife retired last year. We instructed her company to roll over her 401k to our credit union in the form of a 14 month CD (IRA) in the amount of $10891. When we filed our taxes, I neglected to include the 1099R which showed the amount as a total distribution (box 7 indicated a "G"). Several tax attorneys have told us that there is no limit on the amount.
I noticed after I filed that TurboTax used a $7000 deduction that I didn't claim and assessed a penalty for the difference between the $10891 and $7000.
When I tried to fix this via an amended return, our federal refund went from $4009 to a fee of $200 and out state refund went from $4398 to zero.
How can I rectify this? I understand that our refunds will decrease a bit (due to the $7000 deduction going away), but why would they totally disappear?
Thanks for your help!
