Why does 1099-R Summary Form shows Nontaxable Distributions for Sales Tax Deduction on line 40? This makes no sense.

[Beanie]

Why does Turbo Tax change IRA Distributions on 1040 Line 4a and line 4b

[ReneV4]

TurboTax may show different amounts in Line 4a, which is for total distributions and Line 4b, which is the taxable amount, due to various reasons.

For example, if you moved money from one account to another (rollover), the total amount will appear on Line 4a because it was a distribution. However, Line 4b will have a zero (0) because it is not a taxable event. Or, if you have basis in your IRA, the total amount you withdrew will appear on Line 4a, but only the taxable amount will appear on Line 4b.

Because TurboTax may use different Worksheets to determine if you qualify for various deductions, to verify that your numbers are correct, look at your Line 4b. If that amount reflects the total amount of taxable income you expect from your retirement accounts, then the calculations are correct.

[Beanie]

1040: Line 4a is the correct  RMD amount. Line 4b should be $2K - a $2K QCD.  Instead there is a $9K discrepancy.

This discrepancy is coming from Form 1099-R Summary- under the Subheading "Nontaxable Distributions for Sales Tax Deduction." It is in Line 40 "Nontaxable IRA distribution' that the erroneous $9K shows . Line 40 needs to be zero. 

As I can't physically change it to zero-- looking for ideas of how to fix it.   TIA

[Beanie]

CORRECTION--   1040: Line 4a is the correct RMD amount. Line 4b should be $2K LESS  - from a $2K QCD. Instead there is a $9K discrepancy.

The discrepancy is coming from From 1099-R Summary line 40 regarding "Sales Tax" ???

Can't change to zero manually. Ideas?

TOA

[DaveF1006]

TurboTax is treating $9,000 of your IRA distribution as “nontaxable for sales tax deduction purposes.” This amount then carries over to the 1099‑R Summary and lowers the taxable amount on Form 1040 line 4b. That’s why your QCD‑adjusted taxable amount is off by exactly $9,000.

TurboTax uses Form 1099‑R Summary line 40 (“Nontaxable IRA distribution for sales tax deduction”) to track IRA distributions that were used to calculate the state and local general sales tax deduction on Schedule A. Since you can't edit the summary form directly, you have to find the "source" input. Here is how to track down and fix that $9,000 discrepancy:

1. Go to the Deductions & Credits section

1. Federal>Deductions & Credits
2. Scroll to Estimates and Other Taxes Paid
3. Open Sales Tax (or “Other Income Taxes”)

2. Watch for these triggers. Any of these can lead to the $9,000 entry:

1. - You chose “I want to deduct sales tax” instead of letting TT decide  
2. - You entered big purchases (like a car, boat, or home improvements)  
3. - You entered the actual sales tax paid manually

3. Fix the sales tax deduction choice by letting TurboTax choose it automatically. 

1. “Let TurboTax choose whether to deduct sales tax or income tax.”  or you can make the choice to Deduct state income tax instead of sales tax. 
2. If you entered sales tax for a big purchase like a car or boat, delete these.

QCDs reduce taxable IRA distributions, but TurboTax’s sales‑tax logic reduces them again, which is why your taxable amount was off by $9,000.

Once line 40 is cleared, the QCD calculation works correctly.