2018 Form 1040 - Line 4a has incorrect value!!

Forum|Forum|7 years ago
February 26, 2019
11 replies
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I have income from an IRA with a QCD that reduces the taxable amount, and I also have a pension. Line 4a on the 1040 is supposed to have the total of all IRAs and pensions, and line 4b has the total taxable amount. On my final 1040, line 4a was less than 4b, which is clearly not possible. The error turned out to be in the 1040 Worksheet. The entries for the line 4 calculations are, from the top, IRA distributions; Taxable amount; Pensions and annuities; and their Taxable amount. The 3rd line, which should have been the amount of my pension, was left BLANK by TT, although the taxable (full) amount of the pension was correct on the 4th line.

To fix it, I overrode the blank line and entered the amount of the pension distribution. This corrected line 4a on the 1040 and it was then greater than line 4b (by the amount of the QCD deduction).

Although none of this affected my bottom line or taxes owed, it seems like a sloppy mistake and is the second error I've encountered in this year's software. I've been using this program since the DOS days and won't immediately ditch it, but I will be more careful from now on in checking its results!

NCperson

Level 15

your assumption is incorrect; Turbo Tax is correct . Pension payment flow to line 4a but IRA distributions do not

please see page 29 of the Form 1040 instructions at the link below

at the VERY top on the left of Page 29 it states:

"Except as provided next, leave line 4a blank and enter the total distribution (from Form 1099-R, box 1) on line 4b. The IRA distribution is not included in line 4a per the IRS instructions.

But the pension payment is to be included in line 4a At the very bottom of Page 29 (on the right) and continuing onto page 30, the IRS instructions discuss Pension payments. It's a little convoluted the way it's written as it goes on to state that there are a few exceptions to flowing the Pension Payments to line 4a, but it infers a normal pension payment should be listed on Line 4a - which is exactly how Turbo Tax works.

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

what is the other error you uncovered? maybe TT was correct there as well?????

rochrunnerAuthor

Level 2

Thanks for the info. OK, you're correct about the pension not going on line 4a, but in my case the IRA distribution does go there per Exception 3 on page 29 since, as I mentioned, I had a QCD which deducts from the amount of the distribution (which happens to be an RMD). Still makes the values there look "off", but not much more than the way the whole new 1040 is laid out! :-)

The other error is with form MI-2110 of the Michigan return, for calculation penalty and interest. At one point, it takes 25% of $30 and comes up with $30, leading to a ridiculous underpayment penalty. That was definitely something that I needed to correct manually and enter the correct values. I've done tax prep work for AARP's TaxAide program and am familiar with how it's supposed to work.

RWagner245

Level 2

I received an IRS Notice CP2000 which says I owe almost $28,000 in taxes for 2018. In looking at the information provided by the IRS and looking at my copy of my 2018 Form 1040, it appears that Intuit has left the box on line 4a blank while putting the correct amount in line 4b. So, bottom line is that due to TurbotTax incompetence, the IRS believes I am hiding income even though I clearly paid taxes on the full amount. What is the point of using tax software if this is the result???