One of my 1099-R amounts is not being added to line 4a of the Federal Form 1040. Line 4b is correct.

[macuser_22]

And thanks to pointing out what might be a worksheet error.

[prtaylor56]

@macuser_22

So how do I get the 1040 Wks sheet fixed?  There is no "might" about it.  Line 4 labeled Pensions and Annuities is not picking up the amount from its data source (Form 1099-R Summary Line 25.)

I already called this in several days ago (this comment box won't let me put in the Support ID number), but I don't have confidence the agent even understood.  The answer I got was: "I'll put in a fix request, but we have to wait for the final versions of the IRS forms."  

That answer makes no sense, since the defect is in a TurboTax worksheet (1040 Wks), and the affected IRS Form is 1040, and it appears to be already in its final version, as are the instructions.

[prtaylor56]

duplicate

[macuser_22]

I have reported it, but I don't expect an answer soon.

[prtaylor56]

@macuser_22

Regarding your answer above: "BTW: I agree with you - I think the way is is done is dumb - I am just another user like you, and yes, I did take note of the summary screen (that also seems to be mislabeled as 1040 line 16a and 16b on lined 27 and 32d.)  The amount on line 27 appears to be ignored."

It is not line 27 of 1099-R Summary sheet that is the problem.  It is Line 25.  I hope you reported the correct broken link.

[prtaylor56]

@VolvoGirl

If you have followed this chain along after your answer that began "The word from the Turbo Tax Moderator is...."

You will see that I have finally gotten through to macuser_22 on this subject.  The issue is with multiple distributions where some are taxable and others are not.  The Turbo Tax Moderator and you keep referencing the instructions for when all distributions are fully taxable.  

Please read the entire chain here and then report the problem as well.  Or tell me how to contact someone at TurboTax that has the knowledge to discuss this topic and the authority to fix it.

The worksheet that is new for this year (1040 Wks) is in bad shape (broken links to data sources and incorrect references to the new Form 1040 Line numbers.)

That appears to be the root cause of the amount on line 4a being smaller than the amount on LIne 4b, which can't reasonably be the intent of the IRS on this new Form 1040.

[macuser_22]

@prtaylor56 - yes line 25, that was a typo that I corrected.

[prtaylor56]

@macuser_22
@VolvoGirl

Regarding your notes about the IRS instruction that reads:

"More than one distribution. If you (or
your spouse if filing jointly) received
more than one distribution, figure the
taxable amount of each distribution and
enter the total of the taxable amounts on
line 4b. Enter the total amount of those
distributions on line 4a."

Part of your response was:
(That instruction) Is on page 29 of the instructions under the *IRA Distributions* section and applies to multiple IRA distributions, not a mix of IRA's and other types of retirement plans that comes later on page 30.

Thus a both fully taxable IRA's and pensions, 401(k)'s can have nothing on line 4a or some on 4a if not fully taxable.

The instructions for IRA's don't apply to pensions and annuities, and the pensions and annuities don't apply to IRA's."

I don't think that any interpretation of the instructions that leads to the gross distribution amount being less than the taxable amount is what the IRS intends.

But guess what, TurboTax doesn't follow this instruction in the case of two fully taxable Pension distributions either - just tested it. Also, I tested it on the 2016 version.  It looks like TurboTax has never followed this instruction.

It never looked weird as long as the IRA's and Pension lines were separate, because as long as everything was fully taxable for a given distribution type (IRA or Pension) a blank gross amount looked OK, even if it wasn't per the instructions for multiple distributions. And if there were any partially taxable distributions, either IRA or Pension, the corresponding (separated) line would show the total gross amount of all distributions of that type.  So until this year, it was literally not possible to get the nonsense result that TurboTax is now putting on line 4a, when there is a partially taxable IRA distribution and a fully taxable pension distribution, or some similar combination of fully and partially taxable distributions.

[macuser_22]

Does when I test it.  box 1 = 5000, box 2a = 5000, box 7 =7.  Enter 2 1099-R's the same way. line 4a blank, 4b 10000.

Any way, this is in TurboTax's court,  am I am not going to spend any more time on it, because it will not change anything.

[prtaylor56]

@macuser_22

We have been talking all along about 1099-R's not 1099-T's.

But 4a isn't supposed to be blank when there are multiple distributions of the same type:

"More than one distribution. If you (or
your spouse if filing jointly) received
more than one distribution, figure the
taxable amount of each distribution and
enter the total of the taxable amounts on
line 4b. Enter the total amount of those
distributions on line 4a."

 Read the last sentence of the instructions: You agreed to this earlier.

[macuser_22]

TurboTax obviously interprets that to mean if you must "Figure the taxable amount of each distribution" then the entire amount must not be taxable.   If box 2a is the same as box 1 then there is nothing to "figure"  so it follows the rules to leave box 4a blank.

And as I said before, that is under in the IRA rules section on page 29 of the instructions.  The pension and annuities section is separate on page 30 and has no similar statement.   You don't look in the IRA section for the pension rules.

The IRS need to clarify those convoluted rules because we can all read them differently.

So long - moving on.....

[prtaylor56]

@macuser_22

There is a similar statement regarding multiple pensions and annuities in the Simplified Method worksheet on page 31 of the IRS Form 1040 instructions, but it does contain the qualifier "partially taxable", so your point is valid and TurboTax has handled this per the instructions in the past.

The bottom line is that the current Form 1040 will show an absurd-looking number on Line 4a for some filers, which could never happen when the IRA and Pension lines were separate.

Also, there are still linking and labeling errors in the new TurboTax sheet "1040 Wks", as we have both reported.  

I understand why you don't want to deal with this any longer.  I feel the same. Bye, and thanks for your attention to this point.

[samgrif]

I've been looking through all the Q&A on this issue, and also read the IRS instructions 1040.  I was thinking like most everyone that this must be a TT error, but now that I read the instructions for all of the Line 4 components, I'm not so sure.  Anyone have opinions on the IRS making this as confusing as TT?  Take a look at these references:

Under IRA Distributions, "More than one distribution. If you (or
your spouse if filing jointly) received
more than one distribution, figure the
taxable amount of each distribution and
enter the total of the taxable amounts on
line 4b. Enter the total amount of those
distributions on line 4a."  So this must refer to IRA distributions only to this point of the instructions.

Under Fully Taxable Pensions and Annuities, "If your pension or annuity is
fully taxable, enter the total pension or
annuity payments (from Form(s)
1099-R, box 1) on line 4b; don’t make
an entry on line 4a."  So this seems to say that for a pension that is fully taxable due to the typical rules, then you do NOT enter the amount on 4a of 1040.  Which makes TT correct in how it reports this.

Under Partially Taxable Pensions and Annuities, "Enter the total pension or annuity payments  (from Form 1099-R, box 1) on line 4a. ….  If your Form 1099-R shows a taxable amount, you can report that amount on line 4b."  There are several rules about what happens if the 1099-R does not show a taxable amount vs. gross amount, but this is the situation where the IRS says that a pension amount would be included in line 4a.

So I tested this with my fully taxable pension.  Currently as I think it should be reported both the gross and taxable amounts are the same and are NOT included in line 4a.  But if I change the taxable amount on the 1099 to be less than the gross amount, then presto, the gross amount is included on 4a just as we all expected and only the taxable amount is shown in 4b.  So the net is I think TT is working as described in the 1040 Instructions from the IRS.  

What do others think of this?

[Bamboo]

@samgrif I think it needs to be changed, even if the instructions MAY be interpreted as TT is doing. Here is my reasoning:

I don't want to give the IRS any reason to kick the return out and look at it. Why might they do that? Because the gross distribution amount on line 4a will not agree with the gross distribution amount filed by the payors. Think about all this logically:

WHY were lines 15a and 16a on the form (pre-2018)? So the IRS would see the gross distribution amount matched what they had from the payors, indicating that all 1099s were reported.

Why was it OK to have those two lines be zero in some cases? Because the gross distribution amount was on the form on lines 15b and 16b, so no need to put it on 15a and 16a as well.

What is happening with TT's treatment? The gross distribution amount appears NOWHERE on the 1040. So what does the IRS have to do to ensure that all 1099s are reported? Maybe have a person look it over? Write a program to bypass the matching check? Process the return, flag it, and have someone ask questions a couple of years from now? I have lots better things to do with my time than answer questions from the IRS even though my return is correct.

The better interpretation, and what I understand Tax Slayer and H&R Block are doing, is to include total gross distributions in 4a.

[samgrif]

Well, you have good points, I was just finding that by the "book" TT seems to be doing it right.  Ie, if I were filling out the form by hand, I think I would do it the same way based on the 1040 instructions.  But let's think about what the intention was this year for the 1040.  They wanted it to fit on a "post card", so I think they have condensed a lot of things that make it seem a little illogical.  Theoretically 1099's are sent to IRS so they have all the details anyway.  What they really care about is the taxable portion of any income and that is included in 4b.  I think I will file as TT has it working, and we'll see how things go.  I suspect that unless you really have some amount for income, deductions, etc that is really way out of line with averages, they won't come anywhere close to an audit of anyone for line 4a alone.