Question

How do I reduce RMD reported by amount that was after taxes?

Forum|Forum|2 years ago
October 12, 2023
3 replies
0 views

Reduced reported RMD by non taxable amount

TurboTax Deluxe Online

A

Anonymous_

Employee

? More details?

@dmertz

B

BAILYAuthor

In the 80s u could contribute up to around 15% of your wages into a 401k. I contributed 12% PRETAX and 3% AFTER TAX. The 401k was rolled over into a an IRA. The RMD I received shows it was all taxable as if it all was PRETAX but it was not. How do make an adjustment so I do not pay taxes on the AFTERTAX portion?

fanfare

Employee

The 401k was rolled over into a an IRA. "

At this point, I think you lost your pre-1987 basis.

OR

you send IRS a missing Form 8606 for the year of the rollover showing your basis.

IRS may ask for detailed records confirming your numbers.

@BAILY

N

NCPERSON1

@BAILY please restate your question

as an example, if your RMD was $10,000 and 20% or $2,000 was withheld for taxes, meaning you received $8,000 in your bank account, then $10,000 is taxable income to you and $2,000 is reported as taxes withheld.

is that what you are asking?

B

BAILYAuthor

RMD reported on my 1099 R was $20000. However, $10000 was aftertax contribution i made years ago. I want to reduce so i don't pay taxes on that amount again. How do i make an adjustment?

L

Lisa3588

IRS Form 8606 should have been filed for the non-deductible portion of the IRA contributions. This will show your cost basis in the IRA.

TT will calculate and adjust the taxable amount of the distribution by a pro rata amount equal to the ratio of the non-deductible amount to the total value of all your IRAs.

If this is from a 401(k), the plan administrator should have reported the percentage of the non-taxable amount attributable to the distribution.

VolvoGirl

Employee

Is it for a IRA or a 401K? Did you make after tax contributions that were not deductible?

If you are asking about the taxes they took out of the RMD.......You didn’t actually pay the tax, you had taxes withheld like from your paycheck. You still have to enter the whole gross amount (before taxes were withheld) with your other income to figure out the total tax (and it may put you into a higher tax bracket) and then the withholding is subtracted from the total tax to figure your refund or tax due. The Gross amount shows up on 1040 line 4a or 5a and the taxable amount on 4b/5b. The withholding will show up on 1040 line 25b.