Until you enter you year-end balance in traditional IRAs, TurboTax calculates an erroneously high nontaxable amount of your traditional IRA distribution by assuming that the year-end balance is zero. Once you enter the year-end balance, TurboTax recalculates Form 8606 Part I and produces the correct, lower nontaxable amount, your AGI goes up to the proper amount and your tax refund decreases accordingly.
