Other Income Taxes - Mystery Value

[MacTigger]

My son's (15) return this year shows $247 in Other Income Taxes, but last year (the first year we filed for him) this was 0. All he is reporting is an RMD from an inherited IRA. He had to take out less last year than this year, but this year there is this odd $247 in Other Income Taxes, which was not there last year. What is this? Thanks. Mac

[DanaB27]

It seems your son might have a penalty calculated on Form 5329 which carried over to "other taxes" on line 23 on Form 1040. You can also check Schedule 2 line 8.

Did you get a warning during the retirement interview? What is his code in box 7 on Form 1099-R? Entries boxes 1 and 2a? Make sure you enter during the interview that it was inherited and answer all follow-up questions carefully. Also, make sure you indicate that your son took all the required RMD when asked.

1. Click on "Search" on the top right and type “1099-R”  
2. Click on “Jump to 1099-R”

Please see Is an inherited IRA or retirement plan taxable? for additional information.

[MacTigger]

> You can also check Schedule 2 line 8.
How would I check this?

What am I looking for?

I have the TT app, not online.

 > Did you get a warning during the retirement interview? 
There was no "interview".
He inherited this from Grandma, who passed away.

>What is his code in box 7 on Form 1099-R? 
"4 X"

> Entries boxes 1 and 2a?
$4443 and $4443 

The RMD is what our tax person told us to take.

Last year the RMD was 5279.00

• Click on "Search" on the top right and type “1099-R”  

• Click on “Jump to 1099-R”

I did that.

What am I looking for?

The content seems right.

best,
Mac

[DanaB27]

Please review these steps to enter Form 1099-R correctly:

1. Click on "Search" on the top right and type “1099-R”  
2. Click on “Jump to 1099-R”
3. Enter Form 1099-R information and click continue
4. On the "Do any of these situations apply to you?" screen select "I inherited this IRA"
5. Answer the questions
6. On the "How much of the $4,443.00 was a RMD?" select "The entire distribution was a RMD"
7. Continue until you get to the "Tell Us More About This Retirement Plan Distribution" screen and select "I received all the RMD for 2022"
    

To preview the return it might be best to use a computer. Please see How do I preview my TurboTax Online return before filing? To view Form 5329 you will have to follow these steps on a computer (but you might be asked to pay):

1. Select Tax Tools on the left and then Print Center 
2. Select Print, save or preview this year's return
3. Select Federal return

[SteamTrain]

One other set of things that show up in the amount displayed in "Other income taxes" total?

....state withholding in box 14 of the 1099-R....or box 17 of any W-2 for the year.

....or even state taxes paid during 2022 for his 2021 tax return he filed last year.

....or even Federal withholding in box 4 of that 1099-R

BUT...if you are using the Desktop software on Windows...click on the $$ amount in the menu and some of the sources of that total shows up.

[MacTigger]

Dana,

Thanks.

Yes, the info is already entered correctly.

>To preview the return it might be best to use a computer. Please see How do I preview my TurboTax Online return before filing?

I looked at this, but I see no Tax Tools option, and no "Menu" icon with a Tax Tools option.

Mac

[MacTigger]

Steamtrain,

Thanks.

>One other set of things that show up in the amount displayed in "Other income taxes" total?

....state withholding in box 14 of the 1099-R....or box 17 of any W-2 for the year.

None

>....or even state taxes paid during 2022 for his 2021 tax return he filed last year.

None

....or even Federal withholding in box 4 of that 1099-R

None

>BUT...if you are using the Desktop software on Windows...click on the $$ amount in the menu and some of the sources of that total shows up.

I am on a Mac.

Mac

[SteamTrain]

Desktop MAC?

If so, switch to Forms Mode, and look at the Tax Payments worksheet

...the $247 should show up there in one way or another.

[fanfare]

when the code is 4 there cannot be a penalty unless you told TurboTax that you did not take the full amount of the required distribution.

But you took what  the custodian said was the required amount.

@MacTigger 

[MacTigger]

SteamTrain,

Yes, iMac.

I did what you said.

It says:

Prior Year Taxes Paid in 2022

Line 23   Balance Due Paid with 2012 return    $247

I have no clue what this means.

Can you clarify?

Thanks.

Mac

[SteamTrain]

Balance due for 2021 taxes ...line 23 is in the state (or local)  taxes paid during 2022, when you filed his 2021 taxes.  That amount transfers to 2022 ,  because it can sometimes be used as a Fedeal income deduction...but may not be used at all since dependents are only very rarely able to use itemized deductions.

[MacTigger]

Steamtrain,

> Balance due for 2021 taxes ...line 23 is in the state (or local)  taxes paid during 2022, when you filed his 2021 taxes.  That amount transfers to 2022 ,  because it can sometimes be used as a Federal income deduction...but may not be used at all since dependents are only very rarely able to use itemized deductions.

Sorry, but I still don't see what this is.

Why would state (or local)  taxes paid during 2022 affect his federal return?

And how would TT know what state (or local)  taxes my son paid during 2022? 

He is not my dependent.  He is his mother's dependent.

I am filling out his taxes, but I am not listing myself on his tax return in any way.

She is going to sign the return.

Thanks.

Mac

[SteamTrain]

Any state taxes paid by any person, during calendar year 2022 are "potential" Federal tax deductions on their 2022 tax return.......no matter what year the taxes paid were for.  That's on anyone's own tax return ....dependent or not.

So...IF...using desktop software...IF you properly started his tax return by transferring in HIS 2021 tax file from last year, then that $$ amount would be prepopulated......Did he actually pay any state taxes in 2022 for his 2021 state tax return?   For $247?

[SteamTrain]

But it's probably an immaterial amount for him anyhow....dependents are usually not able to itemize deductions...so that $$ amount wouldn't be used...

When might that $247 be used?  If he made charitable contributions Plus state tax payments/withholding that exceeded 12,950 for 2022 

(mortgage payments and personal property taxes would be allowed deductions too...but dependents rarely pay those)

[MacTigger]

I see now.

Yes, he did pay $247 to the state last year when he (I) filed his 2021 tax return.

So, that amount is now carried forward to 2022, and it is considered "income" of some sort, and he has to pay federal taxes on it now?

Mac