dmertz
Level 15

Retirement tax questions

Because you made both distributions and nondeductible contributions for 2019, TurboTax is using Worksheet 1-1 of IRS Pub 590-B to determine the taxable amount of the distribution.  This worksheet treats you contribution after year-end as having occurred during the year.

 

Worksheet 1-1 is to be used when your IRA contributions "may not be fully deductible."  TurboTax probably uses this worksheet  more liberally than intended.  It seems to me that if it's clear that your IRA contribution is nondeductible regardless of the addition to AGI from the IRA distribution, TurboTax should not be using this worksheet, but it does frequently use it anyway.  Use of this worksheet is indicated by an asterisk on Form 8606 lines 13 and 15 and blank lines 6 though 12.

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