Question

Turbotax software adjusted my 2018 & 2019 Pension/IRA income which lower my tax liability. The IRS rejected that action and accessed my penalties. I need TurboTax C Reps. to provide the logic associated with such action.

Forum|Forum|4 years ago
April 19, 2022
2 replies
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Employee

TurboTax will make the entire 1099-R box 1 amount taxable unless YOU tell it that another mount is taxable and enter that into box 2a yourself or tell it that you use the "simplified method" that applies if you had non-deductible contributions to the plan so they can be pro-rated on the distribution and taxable amount. That reduced the non-deductible "basis" each year until it all becomes taxable. If you use the simplified method you must start with the first distribution and use it each following year.

That is something that you tell the software to do.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

D

davmyAuthor

After a review of my 2018, 2019 returns & respective 1099-R's, I have concluded that there is an issue with Turbotax software interpretation of IRS policy. I did not tell it that another amount was taxable. I transferred data from my 1099-R's to software as requested. Example, to this regard I replied to Turbotax software : My 1099-R's box (7) Distribution code had a 7 & the IRA/Sep/Simple had a square. This was my input into the software. The only other thought is that my 1099-R reporting firm(s) should code Box (7) differently to prevent income adjustment..