Estimated tax calculation for 2024 TT seems to be in error

[dougg19]

TT moved my receipt of unqualified pension funds in 2023 from W2 in 2023 to other income (it was entered as W2 income). This works just fine for 2023 taxes, however it appears that when TT calculates taxable income for ES purposes, it adds in the W2 wage and includes it in other income thereby calculating estimated taxes on the unqualified pension income twice. How do I fix this?

[VolvoGirl]

Let's back up.  You should have received a 1099R for pension or retirement funds you got or moved to another account.  How did it get entered as a W2?   You should have  entered the 1099R.  And it doesn't go to Other Income.  How did TT move it to other income?  

Did you get a 1099R?  What code is in box 7?

A 1099R goes under
Federal Taxes on left
Wages & Income
Then scroll way down to Retirement Plans and Social Security
Then IRA, 401(k), Pension Plan Withdrawals (1099-R) – Click Start

[dougg19]

it came as a W2 with wages in box 1, the payment amount was also in non qualified plans in box 11. state taxes and withholding in boxes 15-17. It has come in this form since i retired. Last year it was exactly the same. 

[SusanY1 · Accepted solution]

To remove this from your 1040 ES calculations for next year follow these steps:

1. Navigate to Other Tax Situations
2. Scroll to Form W-4 and estimated taxes (you may need to indicate you wish to "see all" or "let me choose what I work on" to open this field
3. Select Start (or Update)
4. Select No When asked if you would like to update your W-4
5. Select Review Now when asked "Do you want to review your income and deductions?"
6. Continue to the Screen Enter Your 2024 W-2 Wage Information
7. Enter a $0 in the box for Wages under 2024
8. Click Continue
9. Continue through to the end of this section, and your estimates should update accordingly

It is proper and normal for nonqualified pension plans to be reported on a W-2 and transferred to Other Income.  It's not normal for that number to then be doubled, but this appears to be a problem only on the ES worksheet and this workaround will resolve the issue. 

[dougg19]

thanks, will give it a try.

Doug

[dougg19]

Ok it worked for FIT. However, It seems that the state ES  calculation has the same problem. Does anyone know where to find the details of the state ES calculation (I wish TT had the link to worksheets that could be completed by users available; of course they might have time only I don't know where to look).

[dougg19]

I found the form for state.. thanks worksheet was there if you know where to find it. I think worksheets used to have a tab, but its been a long time since I have used TT

Thanks again

[DawnC]

If you are using the desktop version of TurboTax, you can click on Forms at the top and have access to all the forms and worksheets in your return.   You can do this in TurboTax Online from the Print Center.   This method requires payment be made first.  

To calculate your state estimated payment for next year, follow these instructions here >>>  Estimate next year's state taxes.   You will find it at the end of your state return prep.