Can someone explain why Turbo Tax has put $950 in on Form 8606 line 2-Nondeductible contributions basis, when I made no contributions to a Traditional IRA?

[debradefreyn]

$950 is not reported anywhere, and I made no withdrawals or contributions to a traditional IRA. I have no idea where this $950 is coming from?

[DanaB27]

Did you make nondeductible Traditional IRA contributions in the past? If yes then your basis would get carried over to line 2 on Form 8606.

If you never made any nondeductible Traditional IRA contributions or rolled over a nontaxable portion of a qualified retirement plan to the Traditional IRA then you will need to edit the basis screen during the 1099-R interview:

1. Click on "Search" on the top right and type “1099-R” 
2. Click on “Jump to 1099-R”
3. On the "Review your 1099-R summary" screen click "Continue"
4. Answer "Yes" to "Did you have any nondeductible IRA contributions to your traditional IRA from 2024 or prior years?"
5. One the next screen edit the amount entered as basis on December 31, 2024.

Please see Form 8606 Line 2 instructions for additional details. 

[debradefreyn]

Hi. Thanks for the answer.  No, we have never made any nondeductible Traditional IRA contributions.  I only need to fill out the 8606 because we had Roth IRA distributions for the first time last year.  Part III of 8606 is filled out correctly.  I have answered all of the  1099-R questions correctly. No traditional IRA info at all. I had someone from Turbo Tax watch me online yesterday and he couldn’t figure it out either.  He transferred me to a supervisor and the call was disconnected.  I’ve been on hold twice for over an hour and fifteen minutes (total) and cannot get an answer to why it is populating a cost basis here from zero information.  I’ve read the form 8606 instructions many times.  Line 1 is not filled out on the form. Line 2 should be $0. Instead it is $950. Interestingly, the $950 on line 2 does not show up anywhere on my tax return.  Just on the worksheet.  But I don’t want to file the worksheet with line 2 incorrect. 

[fanfare]

worksheets are meant to be worked on until they are correct.

They are not e-filed with your tax return.

[debradefreyn]

Huh?  The IRS instructions say you do file the 8606. I did receive contributions from a Roth IRA and part III of the TurboTax generated worksheet is correct.  Their language is that it is required.  

[debradefreyn]

I tried following the instructions but was never prompted to answer whether I had any nondeductible IRA contributions to your traditional IRA from 2024 or prior years?"

I deleted the 1099-Rs I had and started over. That part is fine. But it never asks me about nontraditional IRAs except whether or not I’d ever converted from a traditional to a Roth and the answer was no. 

[DanaB27]

Since you only had a Roth IRA distribution you won't see the "Did you have any nondeductible IRA contributions to your traditional IRA from 2024 or prior years?" screen in the retirement interview, which is triggered by the IRA/SEP/SIMPLE box being checked. 

I like to take a closer look to see what is going on.  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.

[debradefreyn]

@DanaB27 

1326327

thank you!!

[DanaB27]

Thank you I reviewed your return. It seems the basis numbers were imported data from the previous year. You might want to check your previous IRA Information Worksheets.

If you are certain that you do not have any basis in any traditional IRA then you can delete the entries with these steps:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “IRA contributions” 
3. Click on “Jump to IRA contributions"
4. Select “traditional IRA”
5. Continue until you get to “Did you have any nondeductible IRA contributions to your traditional IRA from 2024 or prior years?” and select “Yes” 
6. Enter $0 and continue
7. Repeat for the spouse.

@debradefreyn 

[debradefreyn]

I was able to zero out this way - yay!!  Still no clue why there would have been anything from last year.  We opened a traditional IRA in 2000 and have never contributed to it or taken a contribution ever.  But, it’s good now.  Thanks so much!!