On the 1099-R I just received from an my annuity company the Taxable amount (Box 2a) is much less than the Gross distribution amount (Box 1). Also, box 5 shows the amount of difference between the gross and taxable amounts. When I enter these amounts in Turbo Tax it is still showing that the taxable amount for income tax purposes is the higher amount in the Gross distribution box. My annuity company told me that the smaller amount in the taxable amount box is what I owe. This is because most of what was distributed to me in 2019 was out of my cost basis not the earnings from my investment. Why is TT still showing the gross amount instead of the taxable amount for income tax purposes?
From the information given, I can't tell for sure where you see the information but I imagine you see it on the Income Summary screen. This screen in TurboTax doesn't reflect the taxable amount but the gross amount (Box1).
The screen is a quick check screen to verify the documents entered.
TurboTax is still picking up the correct taxable amount that you are reporting in 2a for your tax return and will transfer it to the proper line on your tax return.
Here is a way that you can verify that it is working properly:
From the information given, I can't tell for sure where you see the information but I imagine you see it on the Income Summary screen. This screen in TurboTax doesn't reflect the taxable amount but the gross amount (Box1).
The screen is a quick check screen to verify the documents entered.
TurboTax is still picking up the correct taxable amount that you are reporting in 2a for your tax return and will transfer it to the proper line on your tax return.
Here is a way that you can verify that it is working properly:
mdames, it's likely that you are misinterpreting what TurboTax is showing you. With the correct taxable amount in box 2a and the investment in the contract that is nontaxable shown in box 5, it's unlikely that TurboTax would include the entire box 1 amount on Form 1040 line 4d unless you made an entry error. Check your Form 1040 to see that the entire box 1 amount is included on line 4c but only the taxable amount from box 2a is on line 4d.
If the full box 1 amount is being included on line 4d, it's likely that you mistakenly marked the IRA/SEP/SIMPLE box on TurboTax's 1099-R form for this distribution. The code D that you indicated in another post is accompanying the code 7 indicates that the distribution is not from an IRA and must not have the IRA/SEP/SIMPLE box marked.
Also make sure that you have not allowed TurboTax to use the Simplified Method to determine the taxable amount. If you did, delete the 1099-R form from TurboTax and reenter it.
I have entered the amount of the gross dist for an inherited ira rmd($2964). The total amount is not taxable because some of the contributions were after tax (46%). The 1099 r shows taxable amount not determined. How do I get the correct taxable amount to 1040?
When entering a code 4 Form 1099-R with the IRA/SEP/SIMPLE box marked you must calculate the taxable amount yourself outside of TurboTax, then enter the result when TurboTax asks for it. Generally you should use a separate Form 8606 to do this calculation, mark this Form 8606 as being for calculating the taxable amount of the distribution from the inherited IRA (to distinguish it from Forms 8606 that TurboTax automatically generates for Taxpayer and Spouse's own IRAs) and include it with your mailed tax return.
That was my question to the community. I beg to differ on your solution. Turbo Tax does not automatically transfer the information in box 2a on your 1099 R to line 4a on your 1040-SR, and there is the problem for me. Turbo Tax transfers the larger amount in box 1, 1099 R, not the taxable amount in box 2a. I have reviewed the 1099 R every which way with the same result. I am not a rookie, I have been using TT for 12 years and this has never happened. Help
Dear Community, Thank you all for your thoughtful replies, but the problem persists. Before filing my return, I went to My Info on the left column of your screen. From there you can review your actual 1040-SR form as it would be filed. The information on line 4a, IRA distributions of the 1040-SR reflects the amount in box 1 of my 1099 R not the amount in box 2a which I inputted and is a lesser amount. I have completely erased the form and re inputted all the information again with the same result. The information in box 2a on the 1099 R does not show up on line 4a of my 1040-SR automatically, line 1 does.
@Aloneintheworld Why are you worried about line 4a? Line 4a & 5a should be the GROSS amount from 1099R box 1. Line 4b is the Taxable amount that adds to your income.
I want to be sure that I didn't misinterpret your statement.
If this does not completely answer your question, please contact us again and provide some additional details.
Thank you for your response. What I see on my 1040-SR is box 4a is empty. Box 4b has the full amount of the distribution from box 1 of the 1099 R not the taxable amount in box 2a which is less than box 1
Thank you Volvo Girl. Box 4a on my 1040-SR is empty. Box 4b shows the full distribution from box 1 of the 1099 R making the full amount taxable not the taxable amount from box 2a which I determined and inputted,
My friend
Do not get mad or angry.
It does not matter if you are 16 or 61 to drive a car.
If the car does not speed up you press the accelerator , if it speeds up you press the breaks.
It is that simple. So is Turo tax.
Turbo tax is not that complicated the way most of you portray it.
All you have is income. If it is income to you it is expense to some body else.
With all the hoopla on taxes, there are only 2 things income and expenses.
Income is what all you bring in and categorized as earned, capital gain/loss.
Expenses are your taxes, losses in your business and what all goes out of your pocket.
Turbo tax helps you to organize it and experts like LINDA are helping you and do not ask them for each and every nitty gritty things.
What LINDA and and other experts do it to help you in general trouble shooting.
Do not expect them to tell you to clear cookies , restart, delete your forms, reenter correctly--all of this you should have been done before.
Last but not the least, double clicking on the entry column or entry space should solve most of the problems.
A box appears or the program allows you to enter your data
PLEASE NOTE --TURBO TAX HAS OVERDIGING YOUR ENTRIES. JUST OVERRIDE IF THE ENTRIES AND FIX IT RATER THAN ASKING FOR HELP.
OVERRIDING WILL FIX IT.
IF YOU ARE HUNGRY YOU HAVE FEED YOURSELF AND YOU WILL NOT BE HUNGRY.
hope this helps
OK that is a different problem. And 4a can be blank if it is the same amount as 4b. So you have the wrong amount in 4b. Delete the 1099R and re enter it. You must have answered a follow up question wrong. What code is in box 7? @dmertz
Just override if the program allows you and enter the correct info.
If you cannot override, go to forms and fix it.'
The program will tell it is error and over ride is not permitted. Do not bother if your entry is right. It is that simple. as you are the one who knows what is right.
Hope this helps
Thanks, I will try the delete route and re-enter. Box 7 is the number 7 and the ira/sep/simple checked.
@Aloneintheworld , a Form 1099-R with code 7 in box 7 and the IRA/SEP/SIMPLE box marked is required by the IRS to have the same amount in box 2a as is in box 1 and box 2b Taxable amount not determined marked. For this reason, TurboTax properly ignores the amount shown in box 2a. You must enter this Form 1099-R exactly as provided by the payer.
The only reason that the taxable amount of this distribution could be less than the full gross amount of the distribution is if you have basis in nondeductible traditional IRA contributions and the taxable amount must be determined through calculations on Form 8606. If you have made a nondeductible traditional IRA contribution for 2022, you must enter that contribution under Deductions & Credits before TurboTax will have that information to include on Form 8606. If you have basis in nondeductible traditional IRA contributions shown on a previous year's From 8606, you must click the Continue button on the page that lists the Forms 1099-R that you have entered and, when TurboTax asks, indicate that you made nondeductible traditional IRA contributions in a prior year and then enter the amount. After TurboTax prepares Form 8606, TurboTax will include the full gross amount on Form 1040 line 4a but will include only the taxable amount on line 4b.
If you have rolled over into your traditional IRAs any after-tax basis from an employer plan and have not previously reported that on Form 8606, you must click the EasyGuide button in this section, mark the box to indicate that you rolled over funds from an employer plan and then enter the amount of after-tax basis rolled over from the employer plan. TurboTax will then prompt you to provide the required explanation for this adjustment to your basis in nondeductible traditional IRA contributions.
Thank you John,
What I am seeing is on my 1040 SR is box 4a IRA distribution is blank and box 4b Taxable amount has the amount from box 1 of my 1099 not the taxable amount in box 2a. It has been suggested that I delete the 1099 form in my taxes and start over. Other than that I am at a loss.
@Aloneintheworld , you have not said why you believe that any of this distribution should be nontaxable. The only reasons that a portion of this distribution would be nontaxable is if you rolled over that portion to another traditional retirement account or if you have basis in nondeductible traditional IRA contributions. Either way, TurboTax has to calculate the nontaxable amount from your entries, you cannot calculate the nontaxable amount yourself outside of TurboTax.
I am seeing the same/similar problem. I have two 1099-R forms. Both are from rollovers from 401(k) to an IRA, all of the funds were rolled over. One has a Gross Distribution amount, box 2a Taxable amount is 0.0, Check Box 2b Total Distribution is selected, and Box 7 is G-Direct rollover. The other 1099-R has a Gross Distribution amount, Box 2a has a Taxable amount (to effect a change of basis), Box 6 has a Net unrealized appreciation amount, and Box 7 is 7-Simple distribution.
The 1099R Summary form shows Gross (on Line 22) that is correctly the sum from the two 1099-R forms. Line 25 lists that same amount. Line 26 incorrectly lists Taxable amount in box 2a as the sum of the Gross distribution value from the first 1099-R form and the Taxable amount from the second 1099-R form (rather than the sum of the Taxable amounts listed in box 2a of the 1099-R forms). But then the Taxable amount transferred to Form 1040, line 5b, listed on line 32d is 0.00. Line 5a of Form 1040 shows the sum of Box 1 from the two 1099-R forms (as expected), but Line 5b of Form 1040 shows 0.00 (I expected to see the Taxable amount from box 2a of the 1099-R form). As a result, TurboTax is calculating the taxes incorrectly because it isn't including that Taxable amount. Note that after inputting the 1099-R there is a question 'What did you do with the money from Company X?'. If I select the option that I moved the money to another retirement account (which is what I did), the errors described above occur; if I select the option that I 'did something else (cashed out, etc.)' - which is not what I did with the money, the errors described above go away, and I appear to get the correct results. But I don't have a high degree of confidence in the results, because it seems that if I answer that question correctly I get wrong results, but if I answer it incorrectly I appear to get correct results.
@EmptyWallet , $0 taxable on Form 1040 line 5b is correct because, as you said, all amounts were rolled over to a traditional IRA. The cost basis of the NUA shares is only taxable only if the shares are not rolled over to a traditional IRA. Now that the NUA shares have been rolled over, the shares are no longer subject to NUA treatment. Rolling over the NUA shares does not create basis in nondeductible traditional IRA contributions in your traditional IRAs.