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Retirement tax questions
toolman1995, have you taken any traditional IRA distributions since making the $4,000 nondeductible traditional IRA contribution?
Given what you have said, I'm guessing that you are are anticipating taking a $4,000 distribution from your traditional IRAs before the end of 2019. It's correct that TurboTax reduces the calculated refund when you enter your year end balance in traditional IRAs. You are not permitted to take a distribution of only the basis in nondeductible traditional IRA contributions; your distribution is a proportionate mix of basis and pre-tax money, with the nontaxable portion of a $4,000 distribution calculated on Form 8606 Part I as follows:
$4,000 * $4,000 / ($96,000 + $4,000) = $160
The remaining $3,840 of the distribution is taxable and $3,840 of you basis in nondeductible traditional IRA contributions remains in your traditional IRAs to be applied to future distributions. You can see that if you mistakenly omit the $96,000 year-end balance you get the incorrect result that 100% of the distribution is nontaxable.