Form 1040 line 4b taxable IRA distribution appears to be grossly incorrect

[highschoolhank]

Total IRA distributions line 4a is $37103, comprised of 4 different distributions, and is correct.  Taxable amount on 4b shows $4811.  The taxable amount should only a few hundred dollars less than the total amount.  

I went through the 1099R's for the 4 and see nothing wrong.  All are normal distribution code 7 with IRA box checked. Though there should be no connection, the total tax withheld for the 4 1099R's is $4809 (kind of close to the $4811).

I don't see any way to determine how TT came up with $4811.  Clicking on the number in the 1040 form and using the magnifying glass just shows me  all of my 1099R's.

[highschoolhank]

Doing some searching around I find that $4811 is the combined amount from 2 8606's line 15c.  I thought I was pretty much done with federal but hopefully there is some 8606 information I will get prompted for.   However I don't see a red exclamation point by the 8606's in "forms", and TT gave me a big screen showing the traditional IRA total and taxable amounts making me think it was done.

Could this be related to the fact that IRA RMD's were not required last year?

[highschoolhank]

I see 8606 line 6 (total value of all IRA end of 2021) is not filled in.  I presume I will be prompted for this.  Seems to me TT should not show a screen with taxable IRA amount with 8606 not yet completed.

[JohnB5677]

Please clarify and confirm my understanding:

• You have (4) 1099-Rs that total $37,103.
• Distribution code was 7
• These are Traditional IRA's
• You also have (2) 8606's (Nondeductible IRA's) totaling $4,809.
• The 1040 line 4a is $37,103
• Line 4b shows $4.811

[highschoolhank]

All correct except the $4809 which I should not have mentioned.  $4809 happens to be the amount of tax withheld for the 4 1099R's.

See my last post as the problem appears to be data missing from my 8606's.  It seems I will have to enter that data directly on the form since I completed my federal, never got prompted, and could not find any other way to enter it.

[highschoolhank]

As soon as I entered the 8606 line 6 values the correct computations were made.  I presume I had to do this in prior years too, but I feel pretty certain that in those years the 8606's in the forms view would have had a red exclamation point alerting me to a need to do something with them.

Lastly, to reiterate what another poster said, you need to double click the 8606 field which opens a worksheet where the data is actually entered.

[dmertz]

Over the years many requests have been made to TurboTax Product Quality that TurboTax flag an error if there is a blank line 6 on Form 8606 when either line 7 or 8 (or the sum on line 9) is nonzero, but such requests have fallen on deaf ears.

[highschoolhank]

At the risk of belaboring the issue, as I think back I'm sure that in years past TT prompted to verify that line 2 (basis) for 8606 was correct.   In any case, I've made some notes about 8606 for 2022 taxes so I won't freak out again next year.

[dmertz]

As far as I can tell, almost nothing has changed over the years with regard to how TurboTax handles the carryforward of basis.  I haven't tested it recently, but I suspect that TurboTax will still silently erase any carryover basis (Form 8606 line 2) if you mistakenly tell TurboTax that you did not make nondeductible traditional IRA contributions.  However, I think in the past TurboTax would not allow you to reenter the erased amount without explanation, but now TurboTax does not require explanation if the amount reentered is the same as the amount erased.