IRA Distributions - nontaxable

[taxesgalore]

I am at the program point. Here’s a Picture of Your 2024 Income
Turbo tax 2024 Deluxe program Federal Taxes comparison chart 2023 to 2024 is showing thousands of dollars “IRA Distribution - nontaxable” for 2023 & $0 for 2024.  I do not have any IRA nontaxable accounts RMAs for any year. Turbo tax also shows IRA Distribution - taxable amounts for both 2023 & 2024 & do have taxable RMAs for those years.  The 2023 Total Income also shows Thousands more dollars income than the 2024 column total.  2024 should be a better year.  When I look back at my 2023 tax turbo tax forms I don’t see any nontaxable IRA records.
   Where are these numbers coming from?  Thanks in advance😀

[DanaB27]

We cannot see you information. Did you maybe have a nontaxable rollover in 2023?

If you had actual nontaxable distributions from your traditional IRA then you should have a 2023 Form 8606.

[taxesgalore]

Thanks for the thought but I have not entered any 8606 forms just my 1099-R plus some INT & DIV   I have only traditional IRAs. Is there a spot where I may have entered the wrong information in the IRA causing them to appear as nontaxable?

[taxesgalore]

Deleted sent twice in error

[DanaB27]

If your 2023 tax return doesn't have Form 8606 then it doesn't seem that you had a basis (nondeductible traditional IRA contributions) which would cause part of the distribution to be nontaxable.

To confirm, your line 4b on your 2023 Form 1040 shows less than line 4a?

[taxesgalore]

Thanks.   Your suggestion is right on and I just checked.

My 2023 Turbo Tax year 1040 line 4b is smaller than 4a.  Line 4b is about 2/3 bigger than 4a.

Remembering and verifying bank statements in 2023 I did on the same day a one day IRA rollover hand carrying the IRA check XYZ dollars from what I will call bank P to the bank T creating a rollover IRA in bank T with the exact XYZ amount. 

Now reopening my 2024 Turbo Tax program to what it calls, "Picture of Your 2024 Income" comparison  chart  of 2023 to 2024,  the 2023 "IRA Distribution - nontaxable" amount matches exactly the XYZ dollars transferred to the bank T's rollover IRA created on that rollover day.    The 2024 Turbo Tax program is pulling and showing that exact XYZ amount in the 2023  "IRA Distributions - nontaxable" for 2023.   Makes me feel uneasy, it’s a fair amount of money.

 I have 1099-R from both banks, the 1099-R gathered a bit of interest before they were issued.

Why is the 2024 turbo tax program showing it as "IRA Distribution - nontaxable, it’s still in an IRA in bank T.  Why does it show up at all?   Is the problem in the 2023 tax year or the 2024 year?  

I sure appreciate your help

[taxesgalore]

Forgot to comment in the 2023 - 2024 comparisons of Total Income shows 2023 now as larger than 2024 year's Total Income.  2024 should be higher earnings year.   If I subtract the "IRA Distributions - nontaxable" XYZ amount it is a lot closer but does not match the Turbo Tax 2023 Adjusted Income completely.

Thanks again

[DanaB27]

The summary screen in TurboTax shows gross income, not taxable income. Therefore the rollover distribution was included in the comparison.  

To get a real idea of you difference in income it might be good to compare your 2023 and 2024 Form 1040.

[taxesgalore]

Thanks again     OK just looked at both of my 2023 & 2024 1040s line 9 total income.  2023 1040 line 9 shows less total income than the 2024 1040s line 9's larger total income.  That's what it should be, made more in 2024.   The 2023 years 1040 line 9  does not include the (XYZ dollars "IRA Distribution - nontaxable" funds) that the 2024 Turbo Tax program is now displaying in its 2023 to 2024 total income comparison type chart. 

Expressed another way

Turbo tax 2023 & 2024 year 1040s line 9 show the total income for each year as 2023 the lower total income year.

Turbo tax 2024 just before going into the state tax section shows a total income comparison between 2023 to 2024 --- 2023 total income being shown as a significantly higher income year than 2024. 

Is this a Turbo Tax 2024 year programing problem we have stumbled on?

[DanaB27 · Accepted solution]

No, the summary screen show gross income, so it includes lines 2a-6a. Line 9 is the taxable part, so it uses lines 2b-6b.

And since you had the rollover in 2023, the distribution was include on line 4a but it wasn't taxable on line 4b. Therefore, the amount on the summary screen will show higher since it is showing gross income.

[taxesgalore]

Thanks for your time explanation

I believe I understand your explanation   “the summary screen show gross income, so it includes lines 2a-6a. Line 9 is the taxable part, so it uses lines 2b-6b.”  but:

I still don’t understand why a traditional IRA Rollover “xyz amount” that happened in 2003 pops up in Turbo Tax 2024 in Total Income.  It was recorded in my 2023 Turbo Tax program which correctly did not included it in the 2023 1040 line 9.  Now that same 2023 xyz amount magically appears in my 2024 year Turbo Tax program as the 2024 program is comparing 2023 Total Income to 2024 Total Income.

What drives that xyz amount (now marked in 2024 TurboTax program as “IRA Distribution – nontaxable”) to suddenly appear in the 2024 program’s 2023 to 2024 Total Income comparison.  That same xyz amount shown in the 2023 column is being added in the total below its column which is labeled Total Income for 2023.  It is labeled as nontaxable but it’s included in the 2023 Total Income totals.  That same IRA xyz amount only moved via an uncashed check from one bank IRA to another bank IRA within an hour.   It appears to be included correctly in the 2023 Turbo Tax program but has certainly cause me for sure and you probably some too, a lot of stress & concern + wasted time.

The IRA move Bank P sent me a 1099-R and Bank S that generate the new IRA sent a Form 5496.

Why did Turbo Tax include the 2023 IRA rollover xyz amount into the 2023 Total Income, it was not income, just a rollover of funds.