Estimated tax calculation for 2024 TT seems to be in error

Forum|Forum|2 years ago
March 4, 2024
1 reply
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TT moved my receipt of unqualified pension funds in 2023 from W2 in 2023 to other income (it was entered as W2 income). This works just fine for 2023 taxes, however it appears that when TT calculates taxable income for ES purposes, it adds in the W2 wage and includes it in other income thereby calculating estimated taxes on the unqualified pension income twice. How do I fix this?

Best answer by SusanY1

To remove this from your 1040 ES calculations for next year follow these steps:

Navigate to Other Tax Situations
Scroll to Form W-4 and estimated taxes (you may need to indicate you wish to "see all" or "let me choose what I work on" to open this field
Select Start (or Update)
Select No When asked if you would like to update your W-4
Select Review Now when asked "Do you want to review your income and deductions?"
Continue to the Screen Enter Your 2024 W-2 Wage Information
Enter a $0 in the box for Wages under 2024
Click Continue
Continue through to the end of this section, and your estimates should update accordingly

It is proper and normal for nonqualified pension plans to be reported on a W-2 and transferred to Other Income. It's not normal for that number to then be doubled, but this appears to be a problem only on the ES worksheet and this workaround will resolve the issue.

VolvoGirl

Employee

Let's back up. You should have received a 1099R for pension or retirement funds you got or moved to another account. How did it get entered as a W2? You should have entered the 1099R. And it doesn't go to Other Income. How did TT move it to other income?

Did you get a 1099R? What code is in box 7?

A 1099R goes under
Federal Taxes on left
Wages & Income
Then scroll way down to Retirement Plans and Social Security
Then IRA, 401(k), Pension Plan Withdrawals (1099-R) – Click Start

dougg19Author

it came as a W2 with wages in box 1, the payment amount was also in non qualified plans in box 11. state taxes and withholding in boxes 15-17. It has come in this form since i retired. Last year it was exactly the same.

SusanY1Answer

To remove this from your 1040 ES calculations for next year follow these steps:

Navigate to Other Tax Situations
Scroll to Form W-4 and estimated taxes (you may need to indicate you wish to "see all" or "let me choose what I work on" to open this field
Select Start (or Update)
Select No When asked if you would like to update your W-4
Select Review Now when asked "Do you want to review your income and deductions?"
Continue to the Screen Enter Your 2024 W-2 Wage Information
Enter a $0 in the box for Wages under 2024
Click Continue
Continue through to the end of this section, and your estimates should update accordingly