I withdrew $9,176.38 from my pension. In doing so I was taxed 20% off of $9,176.38 and ended up getting $7,341.10 lump sum. Turbo tax is asking what my basis is. Would I put my original total? Or the lump sum I ended up with after the 20% tax? From what I understand I still owe 10% in taxes and can't figure out which number is my basis.
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Neither the number in Box 1 of your Form 1099-R nor the amount of the lump sum that you actually received after taxes were withheld would be the amount you should enter for your basis.
“Basis of retirement income” is referring to the amount of after-tax contributions that were made to the retirement account. The basis is used to determine the taxable amount of a distribution from a retirement account. You would not pay taxes on the portion of the distribution that is attributable to the basis (because it is after-tax money).
So, if you never made any after-tax contributions to your pension, then your basis would be $0. If you had contributed after-tax money to the pension plan, your contributions (or basis) may be shown in Box 5 of your Form 1099-R.
Neither the number in Box 1 of your Form 1099-R nor the amount of the lump sum that you actually received after taxes were withheld would be the amount you should enter for your basis.
“Basis of retirement income” is referring to the amount of after-tax contributions that were made to the retirement account. The basis is used to determine the taxable amount of a distribution from a retirement account. You would not pay taxes on the portion of the distribution that is attributable to the basis (because it is after-tax money).
So, if you never made any after-tax contributions to your pension, then your basis would be $0. If you had contributed after-tax money to the pension plan, your contributions (or basis) may be shown in Box 5 of your Form 1099-R.
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