I invested part of my 2020 401(k) retirement income in a mutual fund. I failed to correctly identify this in my 2020 form 1040 filing and the IRS tells me I need to complete Schedule D and Form 8949. How can I use TurboTax to generate these forms?
Did you file online? Can you log in to your account?
You can always download the forms from the IRS web site.
https://www.irs.gov/pub/irs-prior/f1040sd--2020.pdf
Yes, I did file electronically and I can login to my IRS account. I have downloaded the forms and instructions, but they are asking about the sale of property or stocks of which I did neither. I simply reinvested part of my 401(k) retirement income in a mutual fund.
Thanks for your reply.
What happens inside a 401K is not reported on an income tax return. So do you have a broker's account outside of a retirement plan or IRA that you had sales in it ? If so the broker will issue you a 1099-B for the sales that is reported on the personal return on form 8949 and the Sch D.
And if you took a withdrawal from a 401K or IRA account and invested it in another account (not in another 401K or IRA) you would get a 1099R for the withdrawal. Did you report a 1099R on your return?
Why does the IRS think you had sales? Did you get a 1099B?
you should write back to IRS that you had no investment activity to report on Schedule D.
But, if your Form 1040 has the box checked or a non-zero amount on Line 7, that's a horse of a different color.
Reply back for followup.
Also, make sure you're really talking to the IRS.
My From 1040-SR has both a non-zero value in line 7 and the box is checked. I am fairly confident I am talking to the IRS; I was vetted by ID.me (requiring a video chat to complete) and login through www.irs.gov.
I'm not sure I like being in a corral with different colored horses! My situation must be fairly common; I invested part of my 401(k) retirement income (taxes already withheld) in a mutual fund, and the IRS feels I owe them taxes on it.
Thanks for your advice.
Ok ... so did you take a distribution from the 401K and then use the money to invest in a non retirement account ? If so you DO owe taxes on the distribution no matter what you did with the cash.
Yes, I received a 1099-R and filed it with my return. The 1099-B section of my mutual fund is all zeros. Perhaps the IRS thinks I had sales because the value of my mutual fund increased - a rarity in 2020.
Thanks for your comments.
Even if the distribution from my 401(k) already had taxes withheld?
See my answer here to another person who got that letter.
It has nothing to do with your 401k