"Here is a Picture of Your 2021 Income" treats RMD withdrawals as pension income.

[rberke1216]

Has anybody else been totally confused by TurboTax's treatment of 401K distributions?

After I finish entering federal income, TurboTax presents a summary screen: "Here is a Picture of Your 2021 Income".

It is a nice summary except it only shows IRA withdrawals and appears to ignore a retiree's 401 K withdrawals.

For instance, in the following contrived example there was an RMD of $1,500. There are two 2021disbursements and each disbursement had a 1099 R with a "7" in Box 7.

     $1,234 withdrawal from the 401k provider.

     $266 withdrawal from the IRA provider.

    $1,500 Total

But the "Here is a Picture of Your Income" screen, only shows the IRA withdrawal.

Income

Wages and Salaries              $0

Partnership, S Corp, etc.      $0

IRA Distributions - taxable    $266

Pensions - taxable                 $7,388

Pensions - nontaxable          $0 

Social Security - taxable        $50,000

Social Security – nontaxable $0

Total Income                        $57,654        

Despite this confusion taxes appeared to be calculated correctly.   

After 5 hours of my time and 5 phone calls to TurboTax, I finally figured out that the 401k disbursement was being lumped into the Taxable Pension !!!  This is not at all obvious.

I am posting this in the hopes that others users may avoid my confusion.  (I have already requested that TurboTax modify their software, but that might never happen.)

[rjs · Accepted solution]

TurboTax is showing the totals as they appear on the tax return. 401(k) distributions and pension payments are combined on Form 1040 line 5a. The description on that line is "Pensions and annuities." There is no separate place for 401(k) distributions on the tax return. They are not shown separately.

[rberke1216 · Accepted solution]

The actual return "Here is a Picture Screen" showed this

    IRA Distributions - taxable 1,234
    Pensions - taxable 6,543

But TurboTax could have shown the data differently:

    IRA Distributions - taxable 1,234
    Pensions and 401K Distributions - taxable 6,543

Those few extra words "401k Distributions" would have avoided any confusion and saved me many hours of time.

By the way, TurboTax can do whatever they deem appropriate on the "Here is a Picture" Screen.
It should be consistent with the tax filing, but can contain extra elements that have "no separate place on the tax return".

For instance here is my obfuscated return. Even though "there is no separate place on the tax return" for the last two items THEY STILL APPEAR IN THE PICTURE.

IRA Distributions - taxable 1,234 1040 line 4b
Pensions - taxable 6,543 1040 line 5b
Pensions - nontaxable 11,111 1099 summary worksheet line 45
Social Security - taxable 12,345 1040 line 6b
Social Security – nontaxable 23,456 not shown separately in any worksheet

Total 31,233 not shown separately in any worksheet