What can be done-Military Retirement is taxed-but filed as a pension

Poppa Pek · ‎June 9, 2021

I used Turbo Tax Deluxe for 2017 and 2018. The IRS has charged me $4000 for both years owing $8000 total and state IRS just gave me a bill for $1000. The last few years I have called the number for TurboTax and told a case was created, then when I called back there was no case started. I have had no support by turbotax or Intuit and appears there they don't back up anything by making it difficult to reach them, apparent there is no warranty. The problem is, I am retired Military and have another civilian job. I put all my W-2's in turbotax which the military retirement gets taxed. I called for advice where to put this and did as advised. All agencies Federal and State showed it as a pension and said it was not included in my total income and it was not taxed which I have no idea why the software didn't reflect this and why it was approved by turbotax before sending it to the IRS. The W-2's were included in my forms and package and in those years to show all income and the tax. TurboTax has not come through on the warranty and I am left with $9000 to the IRS and assume another $1000 from the State will come at me next year. Lets not forget the interest the IRS tacks on. What are my true options or am I just stuck paying the IRS the $9000 which I have paid half already.

DoninGA · ‎June 9, 2021

@Poppa Pek The IRS notice or letter you received should have given you options on how to correct the problem, disagree with the assessment or a phone number to call if you have questions.

More than likely you will need to file an amended tax return to correctly report the income and taxes withheld.

You have to sign onto your TurboTax online account using the exact same User ID you used to create the online account.

Close all TurboTax windows on your web browser (including this one). Copy and paste the account recovery website link onto a new web browser window and run the tool.

Use this TurboTax account recovery website to get a list of all the User ID's for an email address. Run the tool against any email addresses you may have used - https://myturbotax.intuit.com/account-recovery

If none of the user ID's received will access your online account, then use the option shown in blue on the account recovery website, "Try something else"

If you used the desktop CD/Download editions installed on your computer, the only copy of your tax data file and any PDF's will be on the computer where the return was created. TurboTax does not store online any returns completed using the desktop editions.

To access your prior year tax returns sign onto the TurboTax website with the User ID you used to create the account - https://myturbotax.intuit.com/

Scroll down to the bottom of the screen and on the section Your tax returns & documents click on Show. Click on the Year and Click on Download/print return (PDF)

If you need to amend the 2017 and 2108 tax returns, see this TurboTax support FAQ for amending a tax return originally completed and filed using TurboTax - https://ttlc.intuit.com/community/amending/help/how-to-amend-change-or-correct-a-return-you-already-...

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Poppa Pek · ‎June 9, 2021

I want to add, I see in my W-2 for Retirement by DFAS for 2017 and 2018, State Tax was not charged but Federal tax was...as I stated those W-2's were attached to my forms and package and don't make sense why Federal IRS wants $8000 back, as I also had child credit for 8 kids. This makes no sense and I need answers as I feel the Federal IRS is taking advantage and Turbo Tax software made mistakes.

VolvoGirl · ‎June 9, 2021

You should have 1099R forms for retirement not W2. Did you enter them as W2s so they showed up on the wrong lines?

For 2017 1099R goes on lines 15 or 16. Did you get the right taxable amount on 15b and 16b?

For 2018 1099R goes on line 4a and 4b. Are they right?

DoninGA · ‎June 9, 2021

Military retirement/pension income is not reported to you on a W-2. It is reported to you on a Form 1099-R. Military retirement/pension income is taxable on a federal tax return. The taxable amount is in box 2a of the 1099-R. Federal taxes withheld are in box 4. The federal taxes withheld are entered on your federal tax return as a tax payment.

The IRS is only concerned with a federal tax return, not a state tax return.

Only the user of the TurboTax software can enter the information from a W-2 or a Form 1099-R. If the tax data was entered incorrectly or in the wrong section of the tax return, that is not the fault of TurboTax.

Look at your tax returns from 2017 and 2018.

Form 1040 (2017) -

Wages from working are on Line 7

Retirement/pension income is on Line 16a. The taxable amount of the retirement/pension is on Line 16b

Total Tax payments payments from W-2's and 1099's are on Line 64

Form 1040 (2018) -

Wages from working are on Line 1

Retirement/pension income is on Line 4a. The taxable amount of the retirement/pension is on Line 4b

Total Tax payments payments from W-2's and 1099's are on Line 16

Use the TurboTax Audit Support Center to get assistance in understanding the letters or notices you received from the IRS.

Go to this website for the Audit Support Center - https://support.turbotax.intuit.com/irs-notice/audit-support/

Poppa Pek · ‎June 9, 2021

Right now I have 2 level 15 coming at me as if I am the one who went to college, got my CPA license and Certifications. As I stated I asked for this information in 2018 and 2019 for 2017 and 2018 taxes. You are right, it was a 1099-R, Yes I know it is taxable. On the 1099-R from DFAS shows I paid Federal tax every month. As I see your out to prove I did something wrong when I called for advice and how to input it. This is what I am talking about, your pointing out flaw and not telling me what I can do now? I paid taxes for my civilian job every month, I paid taxes for my Military retirement, every month. I included W-2's and 1099-R and all required positions, I fear the IRS, as I made sure I followed the software and did as required and asked TurboTax questions if I did not know, as again I am not the professional nor am I trained or certified to be able to know that the software had me input wrong information. How do I fix this. Also Turbo Tax for some reason can't find my 2017 and 2018 filings or copies...So I can't go through them as you want me to...

Critter-3 · ‎June 9, 2021

Ok ... the OPM form 1099-R does not follow the IRS form format which is really not a surprise is it ? So they often do not enter the taxable portion and leave it to you to compute how much is taxable. The program will do this IF AND ONLY IF you do NOT enter a zero in box 2a. Unless you know of a reason the entire box 1 is taxable. So look at your 1040 ... was all of the distribution reported as taxable ?

DoninGA · ‎June 9, 2021