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mhenn1717
New Member

I made a withdraw from pretax ira. Part was distribution to part was the tax. What turbo tax forms will correctly show this?

Turbo tax is taxing the tax portion also

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1 Reply
Hal_Al
Level 15

I made a withdraw from pretax ira. Part was distribution to part was the tax. What turbo tax forms will correctly show this?

TurboTax (TT) will use IRS form 8606 to calculate the taxable portion, then place it on line 4 of form 1040.

You enter at the 1099-R screen and follow the interview, which will ask for your after tax basis.

You cannot solely take out the after tax contributions from an IRA. It's best explained by example. Let's say you have a $6,000 balance in all your existing traditional IRAs on 12-31-18 and earlier in 2018 you withdrew $4000. The $10,000, that was in your IRAs, consisted of $3,000 in non-deductible (after tax) contributions, $2000 in deductible contributions and $5,000 in earnings (interest, dividends & capital gains). Your basis, in all your IRAs, is $3,000. Only 30% of the $4000 withdrawal ($1200) is tax free. TurboTax will divide that $3,000 basis by the $10,000 balance (the $4000 you withdrew plus the $6000 year end balance) to arrive at the 30% tax free ratio.  $2,800 of the withdrawal was taxable. Your revised basis, after that withdrawal, is $1800 (3000-1200).

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