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Returning Member
posted Feb 3, 2022 12:34:45 PM

Traditional IRA Basis

Why is the basis taxed in a Traditional IRA account when I've already paid a monthly  federal and state tax amount after I started receiving my IRA retirement?

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2 Replies
Level 15
Feb 7, 2022 3:01:04 PM

A traditional IRA has no basis, all withdrawals are subject to regular income tax.  If you have tax withheld from your withdrawals, that is only an estimate.  Your final tax owed is calculated on your tax return and you get credit for any withholding.  If you still owe more tax, that means you did not have enough withholding. 

Level 15
Feb 8, 2022 5:50:52 PM

@Wolfman32 

 

Do you have an actual basis in your Traditional IRA, as reported on a previous Form 8606?

If so, you have to tell TurboTax about it.