dmertz
Level 15

Retirement tax questions

Your Form 1099-R is correct as received.  A Form 1099-R for a regular distribution from a traditional IRA is required to have the same amount in box 2a as box 1 and box 2b Taxable amount not determined marked.  This is because all of your IRA accounts, possibly at different custodians, are treated as one large account for determining the taxability of any distribution and any one custodian has no way to know about any IRA accounts or contributions you might have made at any other custodian, nor does any custodian have any way of knowing whether or not you took a deduction on your tax return for any of your traditional IRA contributions.  All of this means that it is entirely your responsibility to report to the IRS and track your nondeductible contributions and entirely your responsibility to determine the taxable amount of any IRA distribution that you receive.

Nondeductible contributions are required to be reported on Form 8606.  Each Form 8606 that you are required to file because you made new nondeductible traditional IRA contributions or you received a distribution from a traditional IRA and you have basis in nondeductible contributions will build off of the previous Form 8606 that you filed.

Enter the Form 1099-R into TurboTax exactly as received under Wages & Income -> Retirement Plans and Social Security -> IRA, 401(k), Pension Plan Withdrawals (1099-R).  After answering the immediate follow-up questions, click the Continue button on the Your 1099-R Entries page and answer the additional follow-up questions.  TurboTax will ask you to enter your basis in nondeductible traditional IRA contributions from your most recently filed Form 8606 (which would/should have been filed in the '90s with your last nondeductible contribution, assuming no distributions from then through 2016) and your December 31, 2017 balance in your traditional IRAs.  TurboTax will then calculate on Form 8606 the nontaxable and taxable portions of your IRA distribution.