Jump to content
ATX Community

Pension Calculations


Christian

Recommended Posts

Do you mean in the 'a' box?  I thought it was wrong, also, until I read the 1040 instructions for this year, and it has changed.

***If you have IRA distributions and/or pension and annuity payments, unlike in prior years when you entered these amounts on different lines, this year they will be combined and reported on the same line. IRA Distributions You should receive a Form 1099-R showing the total amount of any distribution from your IRA before income tax or other deductions were withheld. This amount should be shown in box 1 of Form 1099-R. Unless otherwise noted in the line 4a and 4b instructions, an IRA includes a traditional IRA, Roth IRA (including a myRA), simplified employee pension (SEP) IRA, and a savings incentive match plan for employees (SIMTIP TIP Need more information or forms? Visit IRS.gov. -28- Page 29 of 117 Fileid: … ions/I1040/2018/A/XML/Cycle08/source 14:16 - 24-Jan-2019 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. 2018 Form 1040—Lines 4a and 4b PLE) IRA. Except as provided next, leave line 4a blank and enter the total distribution (from Form 1099-R, box 1) on line 4b. Exception 1. Enter the total distribution***

My taxable amounts have flowed through okay.

 

  • Like 3
Link to comment
Share on other sites

I think jasdlm misunderstood what I was getting at. This occurred today as I was preparing a return. Oddly it had popped up in an earlier return some time back but had corrected and now has for whatever reason come back. I don't see any upgrades I have missed. After removing all IRA indicators the program posted the correct info. I have no wish to call tech support and stay on a phone line for an indeterminate period of time.

Link to comment
Share on other sites

My taxable amounts have flowed thru ok too.  But sometimes gross amounts are smaller than taxable amounts.  Jasdlm, are you saying that's the way it's supposed to be?  If gross and taxable amounts are the same, line 4a is blank.  But when gross is higher than taxable, and with multiple 1099Rs, some IRA, some not, that's when I have the same situation as Christian.

Link to comment
Share on other sites

Yes, Randall.  That is the way I am reading the instruction.  I looked it up initially because my gross amount was less than the taxable amount, and I felt certain something had to be wrong with the software.  However, when I read the instructions, I interpreted them to say that IRAs should only be listed in 4b if the taxable amount and gross amount are not the same, which is exactly what the software was doing on my end.

I guess I didn't understand the OP's question.

Link to comment
Share on other sites

I only scanned thru the instructions so I may not have it right.  But under IRAs, for multiple 1099Rs, it seems to say put the gross amount on line 4a and the taxable amount on line 4b.  It seemed to be saying the same thing for pensions and annuities.  If gross and taxable amounts are the same, line 4a is blank.  If all 1099Rs are marked the same, the software puts the total gross in line 4a and the total taxable in line 4b.  I was thinking with the two lines combined into one line, and the 1099Rs, some IRA and some not, ATX just missed something.  I was wondering how other software was doing it.  Any Drakes users reading this?

 

Link to comment
Share on other sites

Posted on official ATX chat:

For ALL: Please note that the rules for reporting gross and taxable amounts for the IRAs and Pensions have not changed from 2017 in the IRS Form 1040 instructions and the requirements for Form 8606...For IRAs if you only have 1 IRA distribution then the gross amount will be -0- and the taxable amount will be displayed. Pretty much the same goes for the Pensions, if the gross and taxable amounts for pensions are the same, then only the taxable amount will be displayed There are 4 exceptions under IRA reporting in the 1040 instructions that you should review. In addition, we split the gross amounts for the IRA and Pensions on the Form 1040 AGI wkst so you will see the split and totals for each since the IRS has made the amounts for 4a and 4b more difficult to follow when combined.
See if 2017 return matches when using your 2018 amounts.
If you still feel that the results are not correct please contact support to send us your return.

Since people still complained it was wrong, I added this:

I believe what is happening is that when the IRS combined the pension & IRA lines, the grounds for reporting each did not change.  So imagine there were still 2 lines: the IRA line would have zero in line a and the total distributed on line b.  The pension, since the distribution is only partially taxable, would have amounts on lines a & b.  Mush the 2 together and you have the weird situation where the IRA amount is not reported on line a but the pension is.

 

  • Thanks 1
Link to comment
Share on other sites

Thanks for posting this joanmcq.  I see in ATX in the 1099R input screen, tabs at bottom for Summary Totals shows the breakdown for IRAs and Pensions with a Total section.  But the 1040 line 4 still seems whacky when trying to read it and make it sensible.  I wonder if IRS will address this next year.  On the other hand, the 1099R worksheets are  included in the efiling, so they may not care what the 1040 line 4a and 4b look like.  I need to remember to include a copy of the 1099R Summary Recap sheet with the client's copy so they can tie into the numbers on 1040.

Link to comment
Share on other sites

Another wrinkle.  Just entered one which is an inherited IRA.  The 1099R doesn't show it is inherited other than the account name (beneficiary of deceased).  But has IRA/SEP/SIMPLE box checked.  But in ATX input screen, there is a separate box for IRA and Inherited IRA. If I check the Inherited box, ATX puts this in the pension section of their summary sheet and not the IRA section.  ATX also allows both IRA and Inherited IRA boxes to be checked at the same time.  If the IRA box is checked, ATX puts it in the separate IRA section even if both boxes are checked.  So my question is which category does IRS consider an Inherited IRA to be?

Link to comment
Share on other sites

20 hours ago, joanmcq said:

One box says Inherited and the other says IRA.  It could be an inherited 401(k) or other retirement account.

Wouldn't they have to roll over the inherited 401(k) to an individual IRA (inherited/beneficiary) to get the distributions spread out over their life expectancy?  Non-spouse beneficiary.

 

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Restore formatting

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...