I did the mega backdoor Roth IRA. Line 5b on my 1040 that Turbotax calculated contains a number that doesn't make sense to me. It seems wrong to me.
I'll use fake numbers to demonstrate the problem.
My 1099-R for my 401k has (fake numbers):
Box 1: $10,020
Box 2a: $12
Box 5: $10,008
Box 7: G
I entered that data into Turbotax. Turbotax then asked me how much I contributed. According to my pay stubs, that's $10,000 (again, a fake number), so I entered that.
Then Tubotax generated a 1040 that has $32 on line 5b. Why $32?
I generated a pdf with "Include government and TurboTax worksheets (optional)" to try to find out. On the "Form 1099-R Summary" part, in the "Pensions and Annuities" section, it says:
22 Total gross distributions from box 1 of Form 1099-R: 10,020
23 Amount of line 22 converted to a Roth IRA: 10,020
25 Gross distribution transferred to Form 1040, line 5a (if partially taxable) or line 5b (if fully taxable): 10,020
26 Taxable amount in box 2a, Form 1099-R: 12
31 Taxable amount of Roth IRA conversions: 20
32a Taxable amount of distributions: 32
32d Taxable amount transferred to Form 1040, line 5b: 32
All other rows are 0.
So it added 12+20 to get 32. Why did it add 12+20? I think the 12 is already included in the 20. There's no reason to add them together. I think line 5b on my 1040 should be 20. What can I do to force Turbotax to generate a 1040 with 20 on line 5b?
I'm using Turbotax Online Premium (according to my receipt). For some reasons that's not in the edition drop down here.
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It appears that TurboTax is producing a nonsensical result, but it's because you have made an error that is triggering this behavior. Box 5 of the Form 1099-R says that the distribution includes $10,008 of after-tax contributions, so entering $10,000 when asked how much of after-tax money was included in the distribution is an incorrect entry; the correct entry is $10,008. An entry here different from what is in box 5 only makes sense if box 5 is blank because the payer does not know the correct amount, has also left box 2a blank and has marked box 2b Taxable amount not determined.
It seems that making the $10,000 entry confusing TurboTax because if the $10,000 entry was correct because boxes 5 and 2a were blank, the appropriate result would be $20 taxable. With your incorrect entry of $10,000 TurboTax is doing this calculation, but because box 2a is not blank when it's expected to be, TurboTax is also adding the $12 from box 2a. With the entry of conflicting information, I don't think TurboTax can be faulted for producing a nonsensical result.
The reason that your distribution included $10,008 in box 5 and not just the $10,000 that you thought was correct is something that you would have to work out from your records and other information from the plan.
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