When the issuer of the 1099-R prepared the form, they have limited information and based on the information they had at that time, they calculated a taxable portion. However, this number is usually not accurate because the issuer does not know what you did with the distribution or other important information needed to calculate the taxable portion correctly. When you enter it in TurboTax, we ask you a series of follow-up questions to correctly determine the true taxable portion of the distribution.
