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In tests of 2019 marginal rate on IRA (Simple, code 7) withdrawal for joint return of retired 73 yo couple, Turbotax 2018 estimates unrealistic marginal rate (&lt;2%). Why?

Found the problem, and it was my error. In the IRA worksheet, I had mistakenly entered the basis of the IRAs as equal to their value. In fact, their basis is zero. After this correction, the program calculates the marginal withdrawal rates correctly. Thanks to those who answered.

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5 Replies
Level 15

In tests of 2019 marginal rate on IRA (Simple, code 7) withdrawal for joint return of retired 73 yo couple, Turbotax 2018 estimates unrealistic marginal rate (&lt;2%). Why?

Look at the qualifying dividends & cap gain worksheet to see the answer to your question.
Level 15

In tests of 2019 marginal rate on IRA (Simple, code 7) withdrawal for joint return of retired 73 yo couple, Turbotax 2018 estimates unrealistic marginal rate (&lt;2%). Why?

Do you have basis in nondeductible traditional IRA contributions and failed to enter the expected 2019 year-end balance in traditional IRAs?
Level 15

In tests of 2019 marginal rate on IRA (Simple, code 7) withdrawal for joint return of retired 73 yo couple, Turbotax 2018 estimates unrealistic marginal rate (&lt;2%). Why?

Did you say they made a QCD?
Level 15

In tests of 2019 marginal rate on IRA (Simple, code 7) withdrawal for joint return of retired 73 yo couple, Turbotax 2018 estimates unrealistic marginal rate (&lt;2%). Why?

Why do you think it is wrong ?   If most of your income is not taxed or taxed at the favorable cap gain rate then what you describe is very possible.

What is Forms Mode?

Forms Mode lets you view and make changes to your tax forms "behind the scenes."

If you're adventurous, you can even prepare your return in Forms Mode, but we don't recommend it. You may miss obscure credits and deductions you qualify for, and you may forget to report things that will come back and haunt you later.

Forms Mode is exclusively available in the TurboTax CD/Download software. It is not available in TurboTax Online.

Related Information:

If you want to play around with different figures and tax scenarios without affecting your original return you can ….

·         1.  Open your return in TurboTax.

·         2.  From the File menu, choose Save As.

·         3.  Give the copy a new name to distinguish it from the original (for example, by adding "Test" or "Example" to the file name).

·         4. Click  Save. You are now safely working in the test copy and anything you do here will not affect the original.

·         >>  use the WHAT IF tool:

·         - Click Forms Icon (upper right of screen) or Ctrl 2 (forms view)

·         - Click on the Open Form Icon

·         - In the “Type a form name.” area type What-If (with the dash), click on the name of the worksheet - click on Open Form

·         - You will see the worksheet on the right side of the screen; enter the information right into the form

·         - To get back to interview mode - click on the Step-by-Step Icon (upper right of screen) or Ctrl 1

It's always a good idea to make a backup copy of your tax data file, in case your original gets lost or corrupted. Here's how:

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2.     Browse to where you want to save your backup.

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4.     Click Save and then close TurboTax.

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If you make changes to your original tax return file, repeat these steps to ensure your original and backup copies are in-synch.

Related Information:

GEN85508

Answered by TurboTax FAQ to this question

Level 15

In tests of 2019 marginal rate on IRA (Simple, code 7) withdrawal for joint return of retired 73 yo couple, Turbotax 2018 estimates unrealistic marginal rate (&lt;2%). Why?

If you use Forms directly, all bets are off. Review the 1099-R form for errors.
taxable amount should equal distribution.