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Wolfman32
February 3, 2022
Question

Traditional IRA Basis

  • February 3, 2022
  • 1 reply
  • 0 views

Why is the basis taxed in a Traditional IRA account when I've already paid a monthly  federal and state tax amount after I started receiving my IRA retirement?

    1 reply

    O
    Opus 17
    Employee
    February 7, 2022

    A traditional IRA has no basis, all withdrawals are subject to regular income tax.  If you have tax withheld from your withdrawals, that is only an estimate.  Your final tax owed is calculated on your tax return and you get credit for any withholding.  If you still owe more tax, that means you did not have enough withholding. 

    fanfare
    fanfare
    Employee
    February 9, 2022

    @Wolfman32 

     

    Do you have an actual basis in your Traditional IRA, as reported on a previous Form 8606?

    If so, you have to tell TurboTax about it.

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