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Level 1
posted Jan 19, 2025 5:46:15 PM

Inherited IRA flagged as Needs Review

I've entered a 1099-R for an Inherited IRA and entered all of the responses.

 

Despite that, it is still being flagged as "Needs Reviewed."

 

I've read in a different thread that the 1099-R entries are being flagged as needing a review.  So perhaps this will work itself out in an upcoming release of the online product.

 

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1 Best answer
Employee Tax Expert
Jan 21, 2025 2:48:13 PM

 

If your 1099-R for an Inherited IRA is flagged as "Needs Reviewed," it could be due to the tax rules surrounding inherited IRAs. 

 

TurboTax may flag these entries to help ensure compliance with IRS regulations, especially for distributions. The Distribution Code in Box 7 is important. If there are any errors or problems here, like an incorrect or missing code, the review may be triggered.

 

Here’s a step-by-step solution to resolve it:

  1. Sign In to TurboTax Online:
  2. Delete Previous Entries:
    1. Go to the Wages & Income section.
    2. Locate the 1099-R entry for the inherited IRA.
    3. Click the trash can icon to delete the current 1099-R data.
  3. Re-Enter 1099-R Data:
    1. Stay in the Wages & Income section.
    2. Select Add a 1099-R and fill in all the required fields from your form.
    3. Ensure you review all entries carefully to avoid missing or incorrect information.
    4. If you have enter information in box 14, 15, or 16, all boxes must have an entry - even it the entry is $0
  4. Review Federal Section:
    1. If the "Needs Review" flag still appears and you are confident the information is correct, proceed to the Federal Review section.
    2. Note: This flag will not prevent you from filing your return as long as the entries are accurate.

Important Notes:

  • Ensure that you’ve entered the correct distribution codes (e.g., Code 4 for Inherited IRA).
  • If TurboTax keeps showing errors or flags, make sure all entries match your 1099-R form exactly. This includes the boxes for federal and state information.
  • This process can let you to file even if the "Needs Review" flag remains.

 

Review this TurboTax link about inherited IRAs for additional information.

1 Replies
Employee Tax Expert
Jan 21, 2025 2:48:13 PM

 

If your 1099-R for an Inherited IRA is flagged as "Needs Reviewed," it could be due to the tax rules surrounding inherited IRAs. 

 

TurboTax may flag these entries to help ensure compliance with IRS regulations, especially for distributions. The Distribution Code in Box 7 is important. If there are any errors or problems here, like an incorrect or missing code, the review may be triggered.

 

Here’s a step-by-step solution to resolve it:

  1. Sign In to TurboTax Online:
  2. Delete Previous Entries:
    1. Go to the Wages & Income section.
    2. Locate the 1099-R entry for the inherited IRA.
    3. Click the trash can icon to delete the current 1099-R data.
  3. Re-Enter 1099-R Data:
    1. Stay in the Wages & Income section.
    2. Select Add a 1099-R and fill in all the required fields from your form.
    3. Ensure you review all entries carefully to avoid missing or incorrect information.
    4. If you have enter information in box 14, 15, or 16, all boxes must have an entry - even it the entry is $0
  4. Review Federal Section:
    1. If the "Needs Review" flag still appears and you are confident the information is correct, proceed to the Federal Review section.
    2. Note: This flag will not prevent you from filing your return as long as the entries are accurate.

Important Notes:

  • Ensure that you’ve entered the correct distribution codes (e.g., Code 4 for Inherited IRA).
  • If TurboTax keeps showing errors or flags, make sure all entries match your 1099-R form exactly. This includes the boxes for federal and state information.
  • This process can let you to file even if the "Needs Review" flag remains.

 

Review this TurboTax link about inherited IRAs for additional information.