Suspect bug in program. Federal retirement taxable 45,866 being assessed 10% penalty early withdrawal - I am 67.

Forum|Forum|7 years ago
June 4, 2019
14 replies
98 views

It looks like my Federal pension is being treated as an IRA. It tells me that I made a 45,866 deduction. This was the taxable amount of my pension. I entered it right. It tells me I owe 4,587 in early withdrawal penalty. My IRA did have a 14,500 taxable gross distribution. But they are not the same. And anyway I am 67 years old so the early withdrawal would not apply.

By the way, the program is also telling me that I did not finish doing my residential property tax input. I triple checked. It is there. It still wants me to go back and complete it. Doesn't matter, TurboTax tells me I am claiming the Standard deduction.

TurboTax Deluxe Windows

Best answer by fanfare

entering the wrong Distribution Code for your 1099-R can result in form 5329 with a 10% penalty.

brint004Author

Level 2

One mistake I said that TurboTax tells me that I made a 45,866 deduction. What I meant was a 45,866 withdrawal. Sorry.

xmasbaby0

Level 15

Have you checked the date of birth entered in My Info?

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

VolvoGirl

Level 15

And made sure each 1099R is assigned to you and not your spouse if married. Is your spouse under 59 1/2?

brint004Author

Level 2

My personal info birth shows correct date 1951, Wifes is also correct 1952 we are both over 65. Info on 1099R's carried over from last year. Correct then, correct now.

VolvoGirl

Level 15

This is the first report I’ve seen of this. Try updating your program. Go up to Online- Check for Updates. I’ll ask around and ask the moderator.

macuser_22

Alumni - Champ

What code is in box 7 on the 1099-R?

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

brint004Author

Level 2

In both 1099R's it is 7

brint004Author

Level 2

Whoa! For the Federal Pension it was coded a 1. Thank You all!!!

macuser_22

Alumni - Champ

Where do you see any penalty? A code 7 never has an early distribution penalty reguardless of age.

You appear to be using the CD/download version - switch to the forms mode.
Is there a 5329 form in the forms list - if so what line is there an amount on?

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

macuser_22

Alumni - Champ

Then you should get a corrected 1099-R from the insurer since you are over 59 1/2.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**