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Yes, the IRS accepts this.
Taxpayers assume that 4a should be the total amount of IRA/pension/annuity distributions and 4b should be the taxable amount, but that is clearly not what the IRS instructions call for.
You can see for yourself on pages 28 and 29 at https://www.irs.gov/pub/irs-pdf/i1040gi.pdf for lines 4a and 4b.
"Except as provided next,
leave line 4a blank and enter the total
distribution (from Form 1099-R, box 1)
on line 4b."
There are multiple exceptions listed ("except as provided next") in the text that follows, in which you are supposed to add the total distribution into 4a, not leave it blank as stated above. This means that sometimes the total distribution of an IRA/pension/annuity is added to 4a and sometimes it's not.
This was tolerable while IRAs were reported on one line and pensions/annuties on another (yes, this is the way it has worked for years), but in 2018 when the IRS redesigned the 1040 form, they lumped IRAs and pensions/annuities together on one line.
Now we see much more often that some of the total distributions are added to line 4a and some are not, with the result that 4a is sometimes smaller than 4b.
This surprises a lot of taxpayers, but it is exactly what the IRS instructions call for.
I ordered a $4000.00 disbursement from my financial institution. So the institution computed 15%, roughly $706.00, and shows the total disbursement at $4706.00. I received a check for $4000.00 and the $706.00 was submitted to the IRS. My box 4a is blank and 4b lists $4706.00 as you describe in your reply. But I don't see anywhere on my return where the $706.00 was credited against tax owed. It's as if I'm paying tax twice on the same amount, first when I ordered the original disbursement and again, where $4706 was included in box 4b, right?
Thank you.
D. W. Hess
Did you enter the 1099R? The withholding should be in box 4. And shows up on 1040 line 17 with all your other withholding from W2s.
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