Problem with 1099-R and Turbo Tax applicatiopn

[Rick1717Rick]

I was doing my taxes for my 93 year old mother. She has a 1099-R, Statement of
Survivor Annuity Paid, from Office of Personnel Mgmt. I called up the: IRS, OPM, and Turbo Tax help line and had a huge run around. It seems that Turbo Tax was not equipped to handle my mother's issue and repeatedly asked the wrong questions.

In her 2a field it is listed as UNKNOWN. Turbo Tax could not handle this issue and I had to guess what the answer should be. Your application has an entry field for 2a: Taxable Amount, and two checkboxes for taxable amount not determined and total distribution. There should be a third checkbox to include: "Taxable Amount Unknown" which is what is in her 2a field for her 1099-R.

Since this was not included, downstream, I had bad questions such as "Verify Box 2a and Box 2b (which had Unknown in it rather than nothing, or 0.00), Was this Withdrawl and RMD, For the years yo0u received these distributions, was the ammount shown in box 2a of the Form 1099-R used as the taxable amount?

Please get your experts to confirm this scenario and included it in an update to Turbo Tax for this year.

I can supply print screens upon request.

Rick Ragan.

[rjs]

OPM is not following the IRS instructions for 1099-R box 2a. "UNKNOWN" is not a valid entry in that box. It should only be an amount or blank. The IRS instructions for box 2a for the organization that is issuing the 1099-R say "if you are unable to reasonably obtain the data needed to compute the taxable amount, leave this box blank."

When you enter the 1099-R from OPM in TurboTax, if box 2a says UNKNOWN leave it blank in TurboTax. Don't enter anything. Later on, when it asks you if the amount in box 2a was used as the taxable amount in past years, answer Yes, even though box 2a is blank. It will use the amount in box 1 as the taxable amount.

The checkboxes in box 2b are specified by the IRS. TurboTax cannot add a checkbox that is not part of the IRS form. Anyway, another checkbox is not needed. If OPM would fill out the form correctly there would be no confusion.

[MarilynG1]

Generally, the amount in Box 1 is the Taxable Amount, even if Box 2a has 'Unknown' or the 'Taxable amount not determined' box is checked.

You could look at a prior year return to verify this. 

The exception would be is if there is an amount in Box 5, which would indicate that part of the Box 1 amount was either Employee Contributions or Health Insurance premiums.

Be sure that you choose the CSF-1099-R entry screen.

Here's more info on Box 2a Unknown.