Turbotax is recording a different dollar amount fo...
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Turbotax is recording a different dollar amount for my taxable pension on the 1040 line 4b vs. what i entered in the software. IRS is now saying i have underreported?

Example: i entered form 1099-R taxable amt of $20146 in software but the filed return is showing $9688 for taxable amt on Line 4b. why would the amt I entered in software be different than the amt shown on the filed 1040?
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Level 15

Turbotax is recording a different dollar amount for my taxable pension on the 1040 line 4b vs. what i entered in the software. IRS is now saying i have underreported?

Since you said that this is a pension, I assume that box 7 of the Form 1099-R did not have the IRA/SEP/SIMPLE box marked because the distribution was not from an IRA.  I'm also assuming that this is on your 2018 tax return.  TurboTax would place an amount on line 4b than the full amount if you told TurboTax  to use the Simplified Method to calculate a different amount than the full amount of the distribution.  The Simplified Method should generally only be used if you know that you made after-tax contributions to the pension and either the Form 1099-R does not show a taxable amount in box 2a (along with having box 2b Taxable amount not determined marked) or if you were explicitly disputing the payer's calculation of the taxable amount.  Even if you use the Simplified Method, if you did not make any after-tax contributions to the pension plan and you correctly indicate that to TurboTax, TurboTax will determine that the entire amount is taxable.  Only if you mistakenly indicate to TurboTax that it should use the Simplified Method and you further mistakenly indicate that you made a non-zero after-tax contribution to the plan will TurboTax show an incorrect amount on line 4b.

 

When it's appropriate for you to use the Simplified Method to show that the full amount of the distribution is not taxable, the IRS is likely to challenge your assertion unless to provide an explanation statement that is sufficient to satisfy the IRS that your calculation is correct.

 

Unfortunately, TurboTax makes it all too easy to make the mistakes that I mentioned above by always offering the opportunity for you to select the use of the Simplified Method for any pension distribution even though using the Simplified Method is inappropriate for most people.

Level 15

Turbotax is recording a different dollar amount for my taxable pension on the 1040 line 4b vs. what i entered in the software. IRS is now saying i have underreported?

For 2019, if it is a pension it should be on lines 4c and 4d.  If it's not on 4d the IRS will miss it and say you didn't report it at all.

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