Why does TurboTax require me to select the General rule or Simplified method to figure the taxable amount of my annuity rather than using the amount from CSA-1099-R?

[dltgator]

In past years it accepted and used the taxable amount appearing in Box 2a from the CSA-1099-R. Now it calculates the taxable amount based on the method selected, annuity start date, plan cost, number of months payments were received in 2025, and the tax-free amount previously recovered. The value it calculates is different from what appears on the CSA-1099-R.

[ReneV4 · Accepted solution]

If you are being required to choose between the General Rule and Simplified Method, rather than using the amount from your Form CSA 1099-R, it is likely due to the "Taxable Amount" follow-up question. 

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

If you answer "No", TurboTax will assume that you have "basis" consisting of after-tax contributions that have not been fully recovered yet. It will then force the Worksheet to ensure you are not paying tax on your own money twice.

If the amount in Box 2a is already correct and you want to bypass the Worksheet, answer "Yes". TurboTax will assume the entire distribution is taxable (or that the taxable amount was already handled, as in your case) and should stop asking for those details.

If you do need to use the worksheet, you will need the following information:

• Annuity start date
• Plan Cost (Basis), which is the amount of after-tax money you (or your employer) contributed to the plan (Usually shown in Box 9b of your 1099-R)
• Age at start
• Amounts previously recovered, which is the total amount of "tax-free" principal you've already claimed on prior years' returns

[SteamTrain]

@dltgator 

...expanding on that...the Yes-No question is misleading many people....as someone (opinion: ) Foolishly edited the question from what they used in prior years..

If your box 2a has a non-zero number in it..(not blank, nor marked as undetermined), and that number is somewhat lower than the box 1 number, due to an after-tax contribution amount that is noted in box 5...then edit that retirement form again, and when you get to the following page (below), answer it as-if the displayed edits were present  (i.e. you needed to answer YES).  

Answering YES will use the box 2a $$ amount on your for 1040.  Checking lines 5a and 5b on your form 1040, before and after entering that 1099-R, and the 5b amount should be lower than line 5a. 

 (But if you answered No, and already entered some $$ in the "General" or "Simplified" calculation area ,you might need to delete your 1099-R first and re-enter it from scratch...not sure of that though)

_________________________