I have a 403b with several accounts. I have been taking RMD for several years, and get a single 1099-R that covers all accounts. For each I have an amount shown in Box 1 (Gross Distribution), and nothing shown in Box 2a (Taxable amount). Box 2b (Taxable amount not determined) is checked, and Box 4 (Federal income tax withheld) shown an amount of about 30% of Box 1. I entered all this information into TurboTax as requested. At the end, while checking out, TurboTax is saying "You told us only zero of your retirement with XXXXXXX is taxable...,be sure your entries in Boxes 1 and 2a are correct." So, my entries are correct, but I did not tell TurboTax the amount in Box 1 is not taxable. I know the 403b distribution is taxable. Should I just go ahead and proceed, assuming TurboTax will handle this correctly? Or is there some way I'm supposed circumvent the TurboTax system so I don't get i trouble with the IRS? Is this a glitch in TurboTax, or am I missing something?
If the "taxable amount not determined" is checked, the default is to tax the entire amount. Please check that the box is checked on your original entry. Be sure to go through the entire interview.
Once done, I suggest you look at a preview of your tax return and see how it is posted.
You can preview your tax return by going to:
Some other key numbers on your 1040 tax return are:
Line 15 - Taxable Income
Line 24 - Total Tax.
Line 25 - Withholdings.
Line 33 - Payments including Credits.
Line 34 - Overpayments.
Line 37 - Tax owed.
If this does not completely answer your question, please contact us again and provide some additional details.
It's implausible that the distribution is entirely nontaxable. If you made no after-tax contributions to the 403(b), the entire amount is taxable. If you made after-tax contributions to the 403(b), the distribution is a proportionate mix of taxable and nontaxable amounts.