@manisman1995 wrote:
I do have one follow-up question to this advice. What is the purpose of #12, why is that needed to add the gain/earnings the $1200 made? I don't really understand why that is needed?
thank you
Turbotax always asks what you used IRA funds for (it's not an optional question you can skip). This is because there are certain things you are not allowed to do. For example, if you are past your RMD beginning age, you can't rollover an IRA withdrawal into another IRA unless you first withdraw your RMD (you can't rollover an RMD). Your answer here will not change your tax return in any way, but Turbotax asks to make sure you aren't using the money for something prohibited. Also, for someone under age 59-1/2, the question may be used to determine the returned contribution is not taxable. (Even though Turbotax should already know this from your age, the program has a very rigid internal structure and the questions it asks do not always take the full context into account.)
