We took out one lump sum in 2020 and chose to pay taxes on it over 3 years. I noticed on my return that the "taxable amount" is double what we are paying on and is making the amount we owe significantly higher than we expected. Is this correct? Or is there something wrong in the system and I need to amend?
No, the final 1/3 should be showing on your tax return.
If you have already filed your return, you will need to amend it.
See:
Okay, just to be sure: in the section for income box 5a it has the correct amount we are claiming for the 1/3 we are paying on, box 5b is double that amount. Is 5b only for the 5a amount or our whole income? And if so- where did it get the amount from if I never put in any additional amounts?
Box 5a would be your total pensions distributions from all Forms 1099-R's, Box 1. 5b would be the total of your taxable pensions, generally Box 2a of your Forms 1099-R's,
Your (1/3 portion) of your COVID Disaster Distribution is reported on Form 8915-F and flows to line 5b of your Form 1040.
If you have no other pension income your 5b should not be twice that of your 1/3 COVID Distribution. Does your Form 8915-F reflect the correct amount? You can check this by previewing your Form 8915-F. Line 15 of this Form should be your 1/3 final COVID Disaster Distribution.
You didn't enter your COVID Disaster Distribution on a Form 1099-R, and have it included twice because it was carried forward in TurboTax from last year?
I suggest previewing your Form 1040 and looking at Form 8915-F to make sure the right amount is on line 15.
To preview your 1040 if using TurboTax Online:
You can view your entire return or just your 1040 form before you e-file:
You can preview your return in the TurboTax CD/Download software by following these steps: