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New Member
posted Apr 6, 2025 12:18:48 PM

Annuity cash out is being counted twice?

I cashed out a life insurance/annuity this year and received a 1099-R from the company.  The total amount of the distribution from box 1 is being included on line 4b IRA distributions b Taxable amount as well as the smaller taxable amount from box 4 on line 5b.  Why is this?  I don't think that I should be taxed on the total as well as the smaller taxable amount (which was included in the total)  Box 7 distribution code is 7, the IRA/SEP/SIMPLE box is not checked.

0 4 1067
4 Replies
Level 15
Apr 6, 2025 2:56:19 PM

It's implausible that TurboTax would put amounts from a single Form 1099-R on both lines 4a/b and 5a/b.  The amount on line 4b and the amount on line 5b must be coming from different 1099-R forms in TurboTax.

 

It's also implausible that TurboTax would put anything on line 4b from a Form 1099-R that has code 7 in box 7 and the IRA/SEP/SIMPLE box not marked.  The amount on line 4b must be coming from a different 1099-R form in TurboTax, one that either has the IRA/SEP/SIMPLE box marked or has code J, T, Q, N or R in box 7.

 

If you don't have another Form 1099-R that you can identify as the source of the amount on line 4b, perhaps it would be reasonable to delete all of the Forms 1099-R that you have entered and reenter them.

New Member
Apr 6, 2025 7:11:11 PM

I deleted the 1099-r for the life insurance/annuity and the amount on line 4b Form 1040 was reduced by the gross distribution amount of the life insurance cash out.  I added the form back in, double checking every entry, with the same result.  TurboTax is including the Gross distribution from the cash out in line 4b AS WELL as including the taxable amount in line 5b, adding them all together to come up with my taxable income.  I will be calling Inuit support in the morning.

Level 15
Apr 7, 2025 6:02:04 AM

Perhaps @DanaB27 can help.

Expert Alumni
Apr 7, 2025 6:21:37 AM

It would be helpful to have a TurboTax ".tax2024" file that is experiencing this issue. You can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions for TurboTax Online: 

 

  1. From the left menu select Tax Tools. 
  2. Then select Tools below Tax Tools. 
  3. A window will pop up which says Tools Center.  
  4. On this screen, select Share my file with Agent. 
  5. You will see a message explaining what the diagnostic copy is. Click okay through this screen and then you will get a Token number. 
  6. Reply to this thread with your Token number and add @DanaB27 . This will allow us to open a copy of your return without seeing any personal information.  

 

The instructions for TurboTax Download: 

 

  1. On your menu bar at the very top, click "Online"
  2. Select "Send Tax File to Agent"  
  3. Click "Send"
  4. The pop-up will have a token number
  5. Reply to this thread with your Token number and add @DanaB27 . This will allow us to open a copy of your return without seeing any personal information.  

 

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.