My TurboTax Token Number is 1246420. I have encountered a bug. My wife and I each contributed $7,500 to an IRA. I entered this information into turbotax. However, when it processed my information it disallowed my ira because my annual earnings were over the maximum allowed. It generated form 8606 to indicate my $7,500 was nondeductible. However, it failed to add the $7,500 back into my taxable income. Therefore my taxable income was understated and my refund was overstated. My refund should have been $4,755 but turbotax generated a refund of $6,405. thendric1956 [email address removed]
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I don't see your return as I don't work for TT. It disallowed your IRA so not to give you a deduction for investing in an IRA..... there is no add back, just no deduction of income.
Example AGI say is $300k, your IRA deductions is $0. 6% penalty if you don't withdraw the funds every year.
If your income had been $150k and you were eligible, your taxable AGI would have dropped to $142,500
Just make sure to withdraw the funds and any earnings so you dont continue to be charged the 6% fee annually. Here was steps you needed to do:
To enter the nondeductible contribution to the traditional IRA:
To enter the 1099-Rs for the return of excess contribution and the conversion:
As this is a public board, you need to contact tt directly if that is not what happened: contact TT at (800) 446-8848.
The problem is that even though it did not allow the IRA and tt entered it as non deductible it still deducted the $7,500 from income as if it had allowed the ira
@thendric1956 did you do the whole interview like I reported above? Can you drill down within the deductions and look at the supporting forms? Possibly delete them and go through the interview again? I left you the number to call TT directly.
If this is what happened, make sure to pay the additional taxes due through EFTPS.gov or IRS2Go
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