Turbotax is asking questions about my wife's TRS pension I've never had to answer before, plan cost, tax free amount previously recovered, annuity start date. ???????

[bryce_in_tx]

Also death benefit exclusion???

[TomK2023]

The program asks these "Simplified Method" questions if Box 2b ("Taxable amount not determined") is checked on your spouse's 1099-R (as it tries to match those numbers against what is typical for a standard pension).

The Teachers' Retirement System (TRS)  doesn't know how much of her "cost" you've already recovered in previous years, so they leave it to you to calculate the taxable portion using the Simplified Method.

The "Plan Cost' is the total amount of after-tax contributions your wife made to the TRS during her career; it can be found in Box 9b on her 1099-R.  If Box 9b is blank, look at her very first retirement letter from TRS (often called a "Award Letter" or "Benefit Statement"). It usually lists the "Total Contributions" or "Tax-Free Cost."  

If she never made after-tax contributions, this amount is $0.

The "Tax-Free Amount Previously Recovered" is the total amount of that "Plan Cost" you have already "used up" in previous tax years to lower your taxable income.

If this were her first year of retirement, it is $0.  If not, look at last year’s tax return for a "Simplified Method Worksheet" and for the line that says "Recovered in prior years."

The "Annuity Start Date" is the date she became eligible to receive her first pension check (usually the 1st of the month following her retirement date (e.g., if she retired June 30th, the start date is July 1st)).

The "Death Benefit Exclusion" (pertains to someone who passed away before 8/21/1996), thus for a living spouse or a recent retiree, this is $0.

[bryce_in_tx]

Tom,

I appreciate your effort to assist.

First, Box 2b "Taxable amount not determined" is not checked on my wife's 1099-R.  As I stated previously, in box 2a "Taxable amount" is shown the taxable amount for her for 2025.  That is provided by the state on her 1099   There is absolutely no need for me (her) to make any calculation of what the taxable amount is since the state has provided it in box 2a.   And her employee contribution applied to 2025 is listed in Box 5.   So, the state has put on the 1099-R both the taxable amount and tax free amounts for 2025.  There is no need for me (her) to determine either one of these since the state has already provided them on the 1099-R. 

Tom said:

"The Teachers' Retirement System (TRS)  doesn't know how much of her "cost" you've already recovered in previous years, so they leave it to you to calculate the taxable portion using the Simplified Method."

Box 2a lists the Taxable Amount. The state has provided this information to us. There is no need for us to calculate the taxable portion.   

Second, Box 9b "Total employee contributions" is blank. Nothing is in that box.  And if the state doesn't know how much she has contributed of her own money over her teaching years, no one does.  They are the ones who took out of her salary the monthly contribution toward her retirement.  She received, from the state, a form after the end of each year showing the total contributions she had made to her own 403(b) retirement plan.  And I think at the end of her teaching career, as she was getting ready to draw her retirement pay, the state provided her total amount she had contributed to her retirement (her cost) in a letter, if I recall correctly.  The state is the one that has all of this info. 

As I stated, and if you are a TTX employee, please listen to what I'm saying: the wording is very confusing and different from previous years.  The wording led me to say "NO", the total amount she was paid and the taxable amount are not the same.  And they aren't.  Box 1 is larger than Box 2a.  But, apparently that isn't what was being asked.  Someone at TTX needs to revert the wording to what it was in the 2024 versions of TTX and before that because not understanding what the program was asking, I answered it incorrectly, throwing me into the questions about using the General Rule or Simplified Method.  Or, TTX has the option to do nothing and we will be asking the same questions next year since we will have forgotten about this by next tax season.

"Steamtrain" answered my question and solved my issue in the link below.   But, I do appreciate your effort to help.   I've finished my return.  

https://ttlc.intuit.com/community/retirement/discussion/re-1099-r-for-my-wife-texas-teachers-retirem... 

[DaveF1006]

This specific "Simplified Method" loop in TurboTax 2025 is causing a lot of confusion  this year due to a subtle change in the interview wording.

You are correct. If Box 2a has a number and Box 2b (Taxable amount not determined) is NOT checked, the state has already done the math for you. You should not have to provide your wife's entire life history of contributions.

Here is how to "reset" the software and bypass those confusing questions about plan costs and annuity start dates.

1. The "Magic" Answer to the Wording Trap

This message usually appears after the interview screen asks a question like this:

"For the years you received these distributions, was the total amount shown in the form the amount you paid tax on?"

This is the wording you mentioned. For TurboTax, this question is really asking if the taxable amount in Box 2a is correct.?" The Correct Answer: Select YES. Even though Box 1 (Total) and Box 2a (Taxable) are different numbers, saying "Yes" tells TurboTax to stop asking questions and just use the number in Box 2a.

If you say "No" (because the total and taxable amounts are literally different), the software assumes the 1099-R is "wrong" or "incomplete" and forces you into the Simplified Method/Plan Cost worksheets to "help" you calculate the correct number. This 

2. How to Clear the Loop

Once you’ve been lured into the "Simplified Method" screens, TurboTax often "remembers" that you need help even if you go back and change your answer. To fix this:

1. Delete the 1099-R: Go to the 1099-R summary screen and delete your wife's TRS form entirely. 
2. Delete the Worksheet: To be safe, go to Forms Mode (top right), find the "1099-R Worksheet" and the "Simplified Method Worksheet" for her, and delete them.
3. Re-enter Manually: Go back to Step-by-Step and enter the 1099-R again.
4. When you get to the follow-up questions, look for: "Is the taxable amount in Box 2a correct?" or the "mangled" version about the total amount. Answer YES.

3. Regarding the "Death Benefit Exclusion"

You are correct to be suspicious—this is a relic of tax law for people who passed away before August 21, 1996. Unless that applies to your situation, the answer is always $0. The fact that you are even seeing this question is proof the software thinks you are trying to manually calculate a complex pension basis.

To delete the forms that I mentioned above. In the Online version, you cannot manually "type" on the forms, but you can still remove them.

1.  In the left-side menu, select Tax Tools  
2. Select Tools: Click Tools from the sub-menu.
3. Choose "Delete a form": A pop-up window called "Tool Center" will appear. Click the link for Delete a form.
4. Delete the 1099 R and all worksheets associated with it.

If working in the desktop. 

1. Switch to Forms Mode: Click the Forms icon in the top-right corner of your screen (on a Mac, it's a tiny image of a tax form above the words "Personal Info"). 
2. Find the Form: On the left-hand sidebar, you will see a list of all forms and worksheets currently in your return.
3. Delete the Form:  Click the name of the form (e.g., "1099-R Worksheet" or "Simplified Method Wks"). Then, click the Delete Form button at the very bottom of the screen. You will need to do this for each form you choose to delete.

[JM99801]

Just so you know - the exact question is: For the years Jxxx received these distributions, was the total amount shown in the form the amount you paid tax on? (This is the misleading part - it says "total amount" but not clearly whether that is referring to Box #1 or Box #2a) ...However, I followed the instructions, deleted this 1099-R, re-entered it, and answered 'yes' to this mis-leading question. Great - no Simplified Method loop. Note - the summary screen still shows 1-Gross Distribution on that page (with full amounts), and on the easy step form same thing- it shows the full amount.  So that is a bit scary.  But - I checked the 1040 form directly - and you are right - it is using the correct field (2a) on the 1040 form itself. I do hope TurboTax puts it back the right way in future releases. Showing the gross distribution on the summary screen and the easy step form is not right. Thanks!