I entered all my info for my 2022 federal return and have a refund of about $4,200. yay
Then I remember that in 2014 I put $6,500 in an IRA thinking it would give me a tax break at that time. Wrong, what was I thinking? I was participating in an 401K in 2014. The $6,500 was taxable, Turbotax walked me through including a 8606 with my 2014 return.
I retired in 2021 and took my first traditional IRA distribution in 2022. I had already entered the 1099R for that distribution. So I go back to the 1099R Entires and follow the wizard and I indeed get prompted with the question "Any Nondeductible Contributions to your IRA?" This time I answer YES. The cost basis auto-populates the $6,500 from the 8606 from 2014, Turbotax remembered that. Then I am asked to enter my IRA balance as of December 30, 2022. Done - My $4,200 refund is now $3,330! Was it not suppose to decease my taxes?
If I go back to"Any Nondeductible Contributions to your IRA?" and say NO, my refund goes down to $3,200. If I do it again, and answer Yes, it goes back to $3,330. What happened to my $4,200 refund?
So I created a new return and entered all my income. And sure enough, as soon as I say yes to"Any Nondeductible Contributions to your IRA?" about $1000 of my refund disappears. Any idea what might be going on here? Thanks.
Does anybody have an idea why this would be happening?
