Is there a reason line 4a on the tax return would be different than the 1099R summary?

[bowlers-1942]

I have entered 5 1099R's with a total gross distribution of $103,043.  This is the amount that shows on the 1099R Summary.  However, on line 4a of the tax return, it shows a total of $99,371.  Also, the total taxable amount on these 1099R's is $59,543. but the amount on 4b of the tax return shows $57,476.  Why are the amount different? 

[IsabellaG]

We removed the attached tax return, because it contains sensitive personal information, and this is a public forum.

[Bamboo]

@TurboTaxBillMc You can read the instructions that way but are you really suggesting that is what the IRS wants to see on 4a? If your answer is 'yes' then I ask why would they want that?

[iamwhoiam]

@TurboTaxBillMc  Why are some people getting over refunded when the IRS corrects lines 4a and 4b because 4a<4b?  On the other hand why is it working out for some people?  There is definitely confusion with this and line 4a<4b just looks "off".   Due to the IRS combining lines 4a and 4b it's logical that 4a should show the gross distributions of all 1099-Rs.  JMHO

[BMcCalpin]

As for line 4a:

Taxpayers assume that 4a should be the total amount of IRA/pension/annuity distributions and 4b should be the taxable amount, but that is clearly not what the IRS instructions call for.

You can see for yourself on pages 28 and 29 at https://www.irs.gov/pub/irs-pdf/i1040gi.pdf for lines 4a and 4b.

"Except as provided next,
leave line 4a blank and enter the total
distribution (from Form 1099-R, box 1)
on line 4b."

There are multiple exceptions listed ("except as provided next") in the text that follows, in which you are supposed to add the total distribution into 4a, not leave it blank as stated above. This means that sometimes the total distribution of an IRA/pension/annuity is added to 4a and sometimes it's not.

This was tolerable while IRAs were reported on one line and pensions/annuties on another (yes, this is the way it has worked for years), but in 2018 when the IRS redesigned the 1040 form, they lumped IRAs and pensions/annuities together on one line.

Now we see much more often that some of the total distributions are added to line 4a and some are not, with the result that 4a is sometimes smaller than 4b.

This surprises a lot of taxpayers, but it is exactly what the IRS instructions call for.

As for line 4b:

The amount in box 2 on a 1099-R is usually the taxable amount of a pension distribution, but not always. In the 1099-R, if you are asked if this plan is a qualified plan, then you are led through a series of questions which ask for your basis (after-tax investment) in the plan. Depending on how you answer these questions, TurboTax may use the amount of taxable income that it calculated instead of what's in Box 2a (usually using the Simplified Method - see https://www.irs.gov/taxtopics/tc411). 

That is, the pension administrator may not be aware that you have basis in the plan and will put the entire amount of the distribution as taxable in box 2a, whereas your answers may indicate to TurboTax that your taxable amount should be less. This is especially true when pension plans are sold to new administrators; each taxpayer's basis in the plan does not seem to be passed on (you are responsible for keeping this information).

So, it can happen that the number added to 4b may not be the sum of the box 2a amounts.