1099R Taxable Income greater than the total Distribution?

[clperk12]

Why is turbo tax generating Taxable Income of $4000 (1040 Line 5b) for a 1099-R (1B) with a total distribution of $386 (1040 Line 5a)? This doesn't make any sense to me and I am not able to figure out how it is calculating this. I tried drilling into the worksheet but it did not help.

Helping a friend with her taxes - she didn't know why she received this $386 check from a job she left so she just cashed it. She thought it was something from a life insurance policy. I expected a 10% penalty but that doesn't explain the $4k taxable amount to me.

[VolvoGirl]

Did she get any other 1099R?  Maybe one belongs on line 4?

[clperk12]

No, this was the only 1099R she received.

[VolvoGirl]

Try deleting the 1099R.  Does that clear out line 5?  Then enter it again manually.  That usually clears something out.

[SteamTrain]

Hmmm......I wonder if she took a Covid distribution a couple years ago.....that was spread over three years?

I don't know how that is displayed in the software.

[clperk12]

I tried deleting the 1099R and the $4000 is still there. So weird, where else could it be coming from?

[SteamTrain]

@clperk12 

Are you using Desktop/download software?

Windows computer?

IF so we could lead you thru checking for the source in "Forms Mode".

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But again, I would ask....did she take a $12,000 Covid distribution 3 years ago?

[clperk12 · Accepted solution]

Thanks everyone for your help. There was a retirement account closed out in 2020 I did not realize was considered a disaster distribution, it was hard to trace this in TurboTax! I had to go to forms > right click on the amount > Data Source to see it was coming from form 8915C. Then I decided to go look at the prior year taxes and there it was. Your comment about it being $12k reminded me of that, thank you all so much!