1099-R increasing my refund?

[paul1919]

When I entered my 1099-R information, It kept increasing my return by a large amount. Shouldn't it have decreased it?

[AmyC]

It depends. It may have increased  your income to qualify for credits. If it was only adding income, then the amount of tax withheld may have been larger than necessary and increased your refund.

Otherwise, just adding money, no credit and no tax withheld, your refund should go down.

[VolvoGirl]

Why did you get a 1099R?  What code is in box  7?  If you did a  conversion or rollover you may be getting any tax withholding back.  

[paul1919]

I received the 1099-R for withdrawing money fro a roth ira and a regular ira.  The roths were not taxed but the regular ira(s) were except that the people at Charles Schwab  sent the money to the wrong state.  So I put $0 withheld for the tax and used the correct state and payer id so it could be taxed.    The distribution code is 7 and the ira/sep/simple is checked.

[Vanessa A · Accepted solution]

Is it increasing your state or federal refund?  In general, a 1099-R distribution would decrease or not affect your return unless you had taxes withheld.  

Did you enter it in the correct spot?  As a 1099-R or did you enter it as a W-2?

Where do I enter my 1099-R?

The best way to determine why your refund went up instead of down would be to write down the numbers from your 1040 with the 1099-R's in place, then delete them and compare the numbers on your form 1040 to the numbers you wrote down.  You can also print it out (if you already paid for the program)

From the left rail menu in TurboTax Online, select Tax Tools (You may have to scroll down on the left rail menu.)

1. Select Tax Tools 
   
2. On the drop-down select Tools 
3. On the pop-up menu titled “Tools Center”, select View Tax Summary 
4. On the left sidebar, select Preview my 1040 

[paul1919]

It increased the federal refund because that is where it asks you about 1099-R data.  No I did not enter it as a W2.  I have deleted and re-entered the information with the same result.  I will try the last half of your suggestion and view the 1040 form.

[VolvoGirl]

You can't change the state on it.  If they sent withholding to the wrong state you need to file a return in that state to get it back.  Did you get separate 1099R for the IRA and ROTH?  

[paul1919]

Yes I received separate 1099-R forms for each withdrawl (two for me an two for my wife.).  After checking the information, the federal tax withheld on the 1040 for shows more than double the actual tax withheld.  I rechecked the information on the forms and what was enetered and the entries are correct.  I do not know where turbo tax came up the the federal tax withheld.  Is there a way to modify the 1040 form to reflect the real number?

As to the state issue, I do not live in that state and I do not earn money in that state and have been a resident of the state I live it for the last 7 years.  I have to do a 1040 for the state thay sent the money to in order to get it back.

[VolvoGirl]

I would delete all the 1099Rs and see if the extra withholding is still showing up.  1099R withholding goes on 1040 line 25b.  No you just can't change the 1040 etc.  You have to find out why or where the extra withholding is coming from.  Sounds like you have duplicate 1099R forms entered.  

[paul1919]

I have deleted the 1099-Rs already.  I have not entered duplicates. I will try deleting them again and enter 1 at a time and check the withholding to see what shows.  When I did delete the 1099-Rs, the accompanying federal return dropped down.

[torobert222]

TurboTax pulls your info from your prior return, and bases your initial refund off of that info. your 2024 1099R may have been smaller than your 2023 1099R.

If you are divorced with children, and this is your year to claim them, that will also give you a bigger return.

[paul1919]

Thanks but 2024 had a bigger withdrawal.  Also still married and the child just turned 30.

[paul1919]

@Vanessa A 

Thank  you for your suggestion.  I printed a copy and then deleted the 1099-Rs.  Saw the initial Federal withholding tax from SSA.  Then when I entered the federal taxable amount for the 1099-R, the refund dropped.  Next, when I entered the federal tax withheld from the 1099-R, the refund amount increased.  I guess it shows that I withheld more than necessary so the refund increased.

[Vanessa A]

Yes.  If you are having taxes withheld from your retirement, you would see a refund if it is an overpayment just like you would if you were still working and had too much withheld from your pay.