1099-R excess contribution reversal Code 8 J

[tzt7fc]

Turbotax is incorrectly computing 1099-R data to be taxable even though I reversed my contribution with a distribution a few days later. My 1099-R form is:

Box 1: gross distribution of $10,000

2a: Taxable Amount:  $0.00

Box 7 codes:  8 J

Spoke with Vanguard twice to make sure the codes given to me are correct and they insist they are. Why is Turbotax adding the distribution to my total income?

[tzt7fc]

and forgot to mention this is for a Roth IRA excess contribution

[ThomasM125]

I entered a Form 1099-R using the numbers and codes you gave me and it did not show as taxable. Are you sure that you entered $0 in box 2(a) for the taxable amount? If so, you can try deleting the Form 1099-R and re-entering it:

1. Choose the Tax Tools option on your left menu bar

2. Choose Tools

3. Choose the Delete a form option under Other Helpful links 

4. Find the Form 1099-R in the list of forms and delete it

[dmertz]

This Form 1099-R is not adding to your AGI or taxable income.  "Total income" just means items required to be reported on your tax return, taxable or not.  

[tzt7fc]

I did enter $0.00 as the taxable amount. Also tried deleting the form and reentered the data by hand instead of import. Still is inflating my taxable income by $10K.

[DanaB27 · Accepted solution]

Can you please confirm what you see on line 4b (taxable amount) of Form 1040? If this was your only Form 1099-R then it should say $0.

Please be aware that the whole distribution will show as income in TurboTax on the summary screen which shows gross income, not taxable income. To verify that the entry is correct please look at Form 1040 line 4b (taxable amount).

[tzt7fc]

Yes, it is zero now. There was apparently a turbotax bug that is now fixed. Seems to be okay.

The other calculation that was causing me concern is that tax-exempt interest counts into modified gross income. That amount happened to be a very similar number to my excess contribution amount. 

I am closing this issue. Thanks!