I'm retired and receive a pension earned from my employer. I received a W2 from the employer and a 1099-R from the disbursement agent of my employer's retirement plan. Do I need to enter both the W2 and 1099-R into TurboTax? It appears that, in doing so, I'm showing twice the income and therefore will have twice the tax liability to the IRS.
Additionally, TurboTax is showing the 1099-R monies in the "Retirement Plans and Social Security" income category under the "IRA, 401(k), Pension Plan Withdraws (1099-R)" section while the same income from my W2 is showing in the "Wages and Salaries" income category.
How do I know I am not being double taxed?
Thank you!
Yes, you will have to enter both the W-2 and 1099-R on your tax return. One is income from your job and the other is income from retirement distribution, it isn't the same income. If you believe that there is some error, then please contact your employer why they issued both forms.
To enter your W-2:
To enter the 1099-R:
Thank you for the reply. However, it IS the same income. Meaning, the amount I earned from my pension is indicated on my W2 and on the 1099-R is the same amount. As such, my 1040 shows that amount on Line 1 and again on Line 5a and the sum of both is included on Line 15. It is literally being counted as income twice and my tax liability (being calculated by TurboTax) is based on the sum of those numbers. I tested this by deleting the 1099-R from TurboTax completely and the presented tax liability was reduced accordingly. There is no way that one should have twice the tax liability on one source of income. This appears to be a calculation error by TurboTax. I've used TurboTax for at least 15 years with no know calculation errors. This seems to be the first. Can someone please explain this?
@TreePalm wrote:
Thank you for the reply. However, it IS the same income. Meaning, the amount I earned from my pension is indicated on my W2 and on the 1099-R is the same amount. As such, my 1040 shows that amount on Line 1 and again on Line 5a and the sum of both is included on Line 15. It is literally being counted as income twice and my tax liability (being calculated by TurboTax) is based on the sum of those numbers. I tested this by deleting the 1099-R from TurboTax completely and the presented tax liability was reduced accordingly. There is no way that one should have twice the tax liability on one source of income. This appears to be a calculation error by TurboTax. I've used TurboTax for at least 15 years with no know calculation errors. This seems to be the first. Can someone please explain this?
If you are retired and no longer working for the employer in 2020, your pension/retirement income should only be reported on a Form 1099-R.
You need to contact your employer to find out why you were issued a W-2 if it is NOT for wages earned while working for the employer in 2020. The employer would need to issue a corrected W-2 to have the wage income removed.