When I enter the 2023 12/31 total FMV of my IRA's my refund drops?

rptrsn — Tue, 10 Feb 2026 09:15:12 GMT

Re: When I enter the 2023 12/31 total FMV of my IRA's my refund drops?

DaveF1006 — Wed, 31 Jan 2024 03:31:34 GMT

There are two different scenarios where you would be asked this question and let me know if you fall within these two instances.

The most common reason that the FMV affects your tax liability is when you have made a distribution or Roth conversion from a traditional IRA and you have basis in nondeductible traditional IRA contributions shown on Form 8606. Your year-end balance affects the taxable and nontaxable proportions of the distribution; a higher year-end balance means that more of your distribution is taxable.
Did you make an excess contribution to your traditional IRA? There is 6% penalty that is assessed on the excess of your year-end balance.