topic duplicate in Retirement tax questions

One of my 1099-R amounts is not being added to line 4a of the Federal Form 1040. Line 4b is correct.

ccjwasko — Tue, 04 Jun 2019 19:24:14 GMT

Due to the way the IRS has combined the old lines 15 & 16...

Critter — Tue, 04 Jun 2019 19:24:15 GMT

Due to the way the IRS has combined the old lines 15 & 16 on to the new line 4 it will look funny ... just make sure the 4b taxable portion is correct and ignore the confusing line 4a.

It seems that turbo tax is having a few problems with the...

boston508 — Tue, 04 Jun 2019 19:24:16 GMT

It seems that turbo tax is having a few problems with the 1099R

It just kept blinking four Blue balls at me for 20 minute...

jackandlupita201 — Tue, 04 Jun 2019 19:24:18 GMT

It just kept blinking four Blue balls at me for 20 minutes. Would not let me file 1099R. Have to seek an accountant?

You can’t ignore 4a. The IRS will recalculate based on th...

frankbaumert — Tue, 04 Jun 2019 19:24:19 GMT

You can’t ignore 4a. The IRS will recalculate based on this incorrect value. I didn’t catch the error that TT created before filing. The IRS recalculated. I had to complete a 1040X and send a check to fix it.

@frankbaumert So I assume the IRS gave you a refund large...

iamwhoiam — Tue, 04 Jun 2019 19:24:22 GMT

@frankbaumert So I assume the IRS gave you a refund larger than you were supposed to receive. If this is happening with filers due to TT than TT should be responsible for any inconveniences. Did you e-file?

I don't see any reason why the IRS would care about line...

samgrif — Tue, 04 Jun 2019 19:24:23 GMT

I don't see any reason why the IRS would care about line 4a unless you incorrectly reported the taxability of an IRA or pension and something was not included in line 4b, which is the line that is used to calculate tax owed. Maybe I'm missing something in the description.

Case 1: If you have a single IRA distribution or a single...

prtaylor56 — Tue, 04 Jun 2019 19:24:24 GMT

Case 1: If you have a single IRA distribution or a single pension distribution, TT handles it correctly.

Case 2: If you have two or more IRA distributions, or two or more pension distributions, or one or more of each, and all are either fully taxable or all are only partially taxable, TT handles it correctly.

Case 3: If you have two or more IRA distributions, or two or more pension distributions, or one or more of each, and some are fully taxable and others are only partially taxable, TT puts a smaller amount on Line 4a (gross) than on Line 4b (taxable).  This is this case where TT obviously creates a nonsense result, and this is the case TT should fix, whether or not the IRS "cares".  As of the March 6 update of TT, this Case is still not fixed.

The confusion and controversy around this falls into two categories: 1) Some people are talking about different cases without differentiating in their descriptions. 2)  People are reporting different opinions, and apparently different experiences, as to whether the IRS cares about Line 4a on their return.

If the IRS does care about Line 4a, Case 3 is a huge problem for anyone who has it.  Even if not, TT could fix this Case 3 in about 10 minutes and stop all the confusion and controversy.

Fyi in my case, where it does do 4a correctly, I have 3 I...

steve17 — Tue, 04 Jun 2019 19:24:26 GMT

Fyi in my case, where it does do 4a correctly, I have 3 IRAs where one is partially taxable and once pension that is partially taxable...

@steve If your pension were fully taxable, you would see...

prtaylor56 — Tue, 04 Jun 2019 19:24:27 GMT

@steve

If your pension were fully taxable, you would see the error others are complaining about. Specifically, Line 4a (gross) would show an amount smaller than the amount on Line 4b (taxable). Some users are reporting that the IRS is rejecting their return or recalculating their taxes when they submit a return with this error.

I wish others (not you) would quit going on about how the IRS instructions say that Line 4a can be blank, if the distributions are fully taxable. We know that. That is not what this is about. This is about the case where some distributions are partially taxable and others (specifically pensions) are fully taxable. That is the case where TT puts a smaller amount on Line 4a than on Line 4b.

I spoke with an IRS agent and we discussed the issue for...

iamwhoiam — Tue, 04 Jun 2019 19:24:29 GMT

I spoke with an IRS agent and we discussed the issue for about 40 mins. and was told that since my pension was partially taxable then all of my distributions need to be included on line 4a even though my IRAs are fully taxable. She told me that if she were filling out her form she would be sure to put the gross distribution of all 1099Rs on line 4a if one or more of those was only partially taxable. This IS the issue. When one has multiple distributions and not all of them are fully taxable the information on line 4a is incorrect since it does not reflect the gross distributions of all of the 1099Rs. There were no issues when pensions, IRAs and annuities were not combined.
I am Case 3 as described by @prtaylor56

@avian99 @prtaylor56 Exactly what some of us have been sa...

Bamboo — Tue, 04 Jun 2019 19:24:30 GMT

@avian99 @prtaylor56 Exactly what some of us have been saying for weeks. Ask yourselves WHY lines 15a and 16a were on the 1040 in prior years? Because the IRS wants to see the gross distribution amount even if it isn't used in calculating tax. They don't get it with the way TT treats the distributions. And I really don't care if it's possible to read the instructions as TT is; my theory is you're a lot better off giving them what they want rather than what you think they might have said in the instructions.

@avian99 Right. I pointed out the relevant IRS instruct...

prtaylor56 — Tue, 04 Jun 2019 19:24:32 GMT

@avian99

Right.  I pointed out the relevant IRS instructions over a month ago, but the TT folks willfully ignore it and keep bringing up the IRS instructions for fully taxable distributions.

For IRA's: "If you (or your spouse if filing jointly) received more than one distribution, figure the taxable amount of each distribution and enter the total of the taxable amounts on line 4b. Enter the total amount of those distributions on line 4a."  (page 29 of IRS 1040 instructions)

For Pensions: "If you had more than one partially taxable pension or annuity, Figure the taxable part of each separately. Enter the total of the taxable parts on Form 1040, line 4b. Enter the total pension or annuity payments received in 2018 on Form 1040, line 4a." (page 31 of IRS 1040 instructions)

Unfortunately, there are no IRS instructions that specifically cover mixed IRA and Pension distributions.  You might think that common sense would inform TT folks that Line 4a should never be less than 4b, but you would be wrong.

@prtaylor56 @d2richland Agreed. Spoke with TT rep aft...

iamwhoiam — Tue, 04 Jun 2019 19:24:33 GMT

@prtaylor56 @d2richland Agreed.
Spoke with TT rep after my last post and was informed that the directive is to put my email on the list to get notified when there is an update or any info about fixes regarding the issue. I had already done that. Was told that there have been many, many people calling about the issue. No fix yet and no alerts as to the timeline for this being fixed. I know that I can uncheck the IRA box on the 1099Rs but I would prefer not to do that even though it doesn't appear to affect any of the forms. I am not sure how that would be transferred electronically or if that is transferred.

Just noticed this thread: https://ttlc.intuit.com/questions/4679257-when-will-lines-4a-and-4b-be-fixed-my-return-shows-4a-smaller-than-4b-will-the-irs-accept-this">https://ttlc.intuit.com/questions/4679257-when-will-lines-4a-and-4b-be-fixed-my-return-shows-4a-smaller-than-4b-will-the-irs-accept-this</a>
So now I wonder if TT is just going to leave things the way they are.

Just FYI for folks monitoring this 4a issue, I have filed...

samgrif — Tue, 04 Jun 2019 19:24:39 GMT

Just FYI for folks monitoring this 4a issue, I have filed my 1040 via efile and in one week have my refund just as expected. I had line 4a less than 4b due to a partially taxable IRA and a fully taxable pension. The pension was not included on line 4a. So it’s just one example, but my forms were accepted with no problems, so far!

Yes and I got my full refund in 2 weeks with 4a less than...

VolvoGirl — Tue, 04 Jun 2019 19:24:41 GMT

Yes and I got my full refund in 2 weeks with 4a less than 4b.

I wonder why it is going through correctly for some where...

iamwhoiam — Tue, 04 Jun 2019 19:24:42 GMT

I wonder why it is going through correctly for some whereas with others the form is being corrected and they are being refunded too much. It's inconsistent. Thanks @samgrif and @VolvoGirl for posting your results. @samgrif did you get your refund since you state that you have it but then you state that your forms were accepted with no problems so far?
I know of someone who used the free file forms on the IRS website. That person had partially taxable and fully taxable IRAs and a pension and the total distribution for everything was included on line 4a. This would make me think that they want all of the gross distributions on line 4a.

The inconsistent results may reflect different handling f...

prtaylor56 — Tue, 04 Jun 2019 19:24:45 GMT

The inconsistent results may reflect different handling for e-file and paper file (just a guess). The IRS computers may ignore Line 4a and just look for consistent and correct calculations involving 4b. But any human reviewer reading a paper 1040 is going to want to investigate why the gross distributions are less than the taxable portion, leading to unpredictable conclusions and actions by that reviewer.

TT stands alone on this one. Every other product and service that people have reported on puts the total gross of all distributions on 4a, if any one of them is only partially taxable. Also, people who have actually spoken with IRS representatives report that they expect 4a to be total gross distributions, when any one of them is partially taxable.

Meanwhile in the TT alternate universe, we have apparently one individual who has decided to interpret the instructions differently, and won't be moved by any other input.

I would think that if a person was reviewing the forms th...

iamwhoiam — Tue, 04 Jun 2019 19:24:46 GMT

I would think that if a person was reviewing the forms they would be able to add up the distribution info and confirm that the taxable distribution was correct and determine that some info was omitted from line 4a because those distributions were fully taxable. However, this is an assumption.
I still don't see any fix although the TT agent whom I spoke with said there should be another update coming later this week. I am still holding off on filing but want to file by early next week. I would prefer to e-file and just want to be sure that everything is filled out correctly. I've used TT for many years and this is the first time I've had an issue and been concerned about filing.
Someone else posted @ 2 days ago that because one of his distributions was not included on line 4a and 4a was less than 4b he received a correction and was over-refunded. Can't find the thread now and don't think he stated whether he e-filed or paper filed.