There are two different places in TurboTax where it asks for you year-en value in traditional IRAs. The most common reason that the FMV affects your tax liability is when you have made a distribution or Roth conversion from a traditional IRA and you have basis in nondeductible traditional IRA contributions shown on Form 8606. Your year-end balance affects the taxable and nontaxable proportions of the distribution; a higher year-end balance means that more of your distribution is taxable. (TurboTax assumes that your year-end balance is zero until you enter it.)
The second place that TurboTax needs to know your year-end balance is if you made an excess contribution to your traditional IRAs. The 6% excess contribution penalty is calculated on the amount of the excess or your year-end balance, whichever is less.
