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- Posted Thank you. That is what I have done. I guess I will hav... on Retirement tax questions. June 7, 2019 4:01 PM
- Posted Thank you macuser_22 -- I know you cannot combine basis... on Retirement tax questions. June 7, 2019 4:00 PM
- Posted I just ran into the same problem described above. TurboT... on Retirement tax questions. June 7, 2019 4:00 PM
- Posted I am confused by the comment in the last sentence about i... on Retirement tax questions. June 6, 2019 6:27 AM
June 7, 2019
4:01 PM
Thank you. That is what I have done. I guess I will have to submit revised 8606's for the years 2013-2016 that Turbotax dropped. Is there anyway to do those electronically, or do I have to use paper? One comment -- the interview for Nondeductible Contributions says "Let us know if [name] made and kept track of any nondeductible contributions to [name] traditional IRA from 2016 or prior years. (this is not common). It then says "Most people do not make or track any nondeductible contributions to their IRAs." While I would agree that most people do not MAKE nondeductible contributions to prior year IRAs, I strongly disagree that most people do not TRACK nondeductible contributions. If this is how I lost the prior year reporting then this really needs to be fixed and the language changed.
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June 7, 2019
4:00 PM
Thank you macuser_22 -- I know you cannot combine basis and they should never be combined, but that is exactly what TurboTax did so it's clearly a bug. I was trying to correct my basis which was zero since TurboTax had dropped reporting the Form 8606s the last few years. I was using TurboTax's interview for non-deductible Traditional IRAs where it displays the Basis it has from the prior year's and asks you to revise it. If you do, it then asks you to provide an explanation in a line-by-line format with associated numbers. I did this and checked the Forms and I now had a new "Blank Form" with my entires. Then I did my Spouse's corrections and was surprised when the explanation entry form already had my entries in it. When I added a new entry for her it got added to the total. Note - that I did not have a 2017 contribution while she did, so she will have a form 8086 but I won't. I would be happy to repeat this error with someone from TurboTax if I could figure out how to reach them (email or phone).
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June 7, 2019
4:00 PM
I just ran into the same problem described above. TurboTax's handling of Traditional IRA Basis needs to be fixed. I just discovered that they dropped the 8606 from several years even though they created the worksheet. This year I found an interview to enter explanations for the Basis discrepancy, but then they merged both my and my spouse's explanations into one combined basis that adds both out numbers together, even though spouses' IRA Bases should never be combined. And it then gets included this combined mess in the Tax return as a "Blank Form".
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June 6, 2019
6:27 AM
I am confused by the comment in the last sentence about it being "not an uncommon mistake" to roll a large 401(k) balance into a traditional IRA with a significant basis. While doing so would indeed dilute the percentage of the non-deductible contributions Basis within the aggregate of the now larger traditional IRAs resulting in more taxes having to be paid from the IRAs, wouldn't it identically reduce the balance within the 401(k) and resulting RMD withdrawal subject to taxes at the same time? Since the tax rate and distribution period is the same on both 401(k) withdrawals and on the taxable (i.e. non-Basis) component of IRA withdrawals, the net taxes would be identical whether or not the 401(k) balance had been transferred. The only difference I see is that with 401(k)s you can defer taking the Required Minimum Distribution (RMD) withdrawals (and paying the associated taxes) beyond age 70 1/2 if you are not retired, whereas with IRAs the distributions must start at age 70 1/2 regardless of retirement. So if you have an IRA with a significant basis are not planning to retired until after age 70 1/2, it might make sense to not roll-over 401(k) funds into the IRA so you can minimize the taxes on the IRA RMD withdrawals while you are still working. If I'm not understanding any of the above correctly, please explain. Thank you in advance.
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