Does anyone know why Turbo Tax basic handles IRA minimum distributions incorrectly?

Forum|Forum|7 years ago
June 6, 2019
1 reply
14 views

Despite entering the correct taxable income amounts for two IRA distributions (Item 2a), Turbo Tax used the gross distributions (Item 1) to calculate my taxable income.

TurboTax Basic Mac

Best answer by dmertz

Traditional IRA distributions are fully taxable unless you have basis in nondeductible traditional IRA contributions or if you made a Qualified Charitable Distribution from your IRA.

If you have basis in nondeductible traditional IRA contributions, click the Continue button on the Your 1099-R Entries page, indicate that you made nondeductible contributions to your traditional IRAs, then enter or confirm you net basis in nondeductible traditional IRA contributions. Also enter you December 31, 2016 balance in traditional IRAs. TurboTax will prepare the Form 8606 required to determine the taxable amount of your traditional IRA distribution.

If you made a Qualified Charitable Distribution from your traditional IRA, indicate this in the follow-up to entering your Form 1099-R.

dmertzAnswer

Level 15

Traditional IRA distributions are fully taxable unless you have basis in nondeductible traditional IRA contributions or if you made a Qualified Charitable Distribution from your IRA.

If you made a Qualified Charitable Distribution from your traditional IRA, indicate this in the follow-up to entering your Form 1099-R.

cliffgilesAuthor

Level 2

OK, that answers my question; however, the fact that I'm asked to enter the taxable amount of the distribution led me to believe that Turbo Tax had the information it needed. If the entered gross and taxable amounts differ, TT ought to force me to enter the necessary information to fill out the Form 8606 without my knowing to hit the Continue Button. Fortunately, I only use Turbo Tax to prepare an estimate for my CPA, who got it right.