Need Help with H&R tax for Form 8606

[mystang52]

I have a very small after tax IRA, and took my first RMD in 2025. When I try to enter the info into my Block software, it keeps applying the non-tax calculation to a small pension I have. I can't figure out how to jimmy the numbers to show they apply to my RMD. I plan to call H&R, but fear this may stump whoever I speak with. Is anyone familar with this and what, if anything, I'm doing wrong?

 

[Gumby]

I have a tIRA with a basis. I also have a pension with a very small basis (different percentage). I am not yet in RMD land, but I do Roth conversions. I use H&R Block software, but I have not seen the problem you mention. Have you gone to the actual forms to see what it may be putting there?

I can tell you that there is a separate "interview" for the pension basis and it does not take the Form 8606 into consideration at all. It asks a bunch of questions about what I contributed after tax, when the pension started and how long it lasts and if it's dual life and such, and then it calculates the tax free portion.

The form 8606 "interview" asks only questions about your total IRA balance and your basis. It takes the tax free part of the distribution from your basis and remembers the result. The next year, it takes the remaining basis from last year's form 8606, asks you the total 12/31 IRA balance and recalculates. I can't remember what it did the first year I took a tIRA distribution and had my first Form 8606.

 

[BooBoo]

This software has many bugs. I have seen issues this year and last year Last year I tried to contact them. Good luck with that, they really don't want feedback. Just wait for software update and hope they address problem.

 

[Gumby]

This software has many bugs. I have seen issues this year and last year Last year I tried to contact them. Good luck with that, they really don't want feedback. Just wait for software update and hope they address problem.

As a general rule. I first do my taxes with pencil and paper, then I plug everything into the program. If the numbers come out different, I dig until I find out exactly why, because it means either I did not understand the particular tax issue or law, I made a calculational error or there is a bug in the program. I have spent hours on tracking down these differences. I may be one of the few people not a tax accountant to actually read the tax code, 26 U.S.C. Sec. 1 et seq., with its impenetrable language (having been lawyer for 27 years helps there).

Sometimes I was wrong, sometimes the program was wrong. In the latter case, I have in years past emailed them about it. The bugs were always subsequently fixed in an update. But maybe they would have been fixed without my input.

 

[jazz4cash]

Hmmm. My pension basis is addressed on the 1099R that shows a portion of the proceeds are non taxable. I use Block software also but none of my IRAs have basis.

 

[Gumby]

Hmmm. My pension basis is addressed on the 1099R that shows a portion of the proceeds are non taxable. I use Block software also but none of my IRAs have basis.

Yes, sometimes the pension payor tracks the basis, calculates the portion of the payment that is non taxable and reports the gross distribution in Box 1 and the taxable amount in Box 2a of the 1099R. The young wife's payor does that for her. However, mine does not. It just reports the gross distribution in Box 1 and checks the "Taxable amount not determined" box in 2b. So I have to keep track of my basis and calculate with the help of the program how much of my pension is taxable every year.

 

[mystang52]

OP here, to clarify. I get 2 small pensions, fully taxable. Separate from that, I have an IRA that includes a small basis for after tax contributions. It's this IRA withdrawal (RMD) that needs adjusting via Form 8606. But H&R is using that afer tax basis and applying it to one of those pensions, so my net tax savings is less.. And the system won't let me manually complete 8606.

 

[Gumby]

I think you can override the entries in any form, but that may prevent e-filing.

 

[mystang52]

OP here. On Monday I'm calling H&R. In the interim, I manually completed the 8606. On the H&R form for my RMD, I entered the full amount, and in the box below I entered the adjuseted "taxable amount" per the 8606. The difference is only $300 or so. Presuming the efile goes through and I get the stated refund amount, I'll then do a 1040X just to officially file that Form 8606. Unless, by some miracle my call to H&R gives me a solution.

 

[Sunset]

OP here, to clarify. I get 2 small pensions, fully taxable. Separate from that, I have an IRA that includes a small basis for after tax contributions. It's this IRA withdrawal (RMD) that needs adjusting via Form 8606. But H&R is using that afer tax basis and applying it to one of those pensions, so my net tax savings is less.. And the system won't let me manually complete 8606.

Strange it is considering a pension as an IRA withdrawal. Could it be a code selection on the pension ? It's been 2 yrs since using H&R but I never had a issue with it remembering the IRA basis and carrying it over year to year and applying it only to the proper respective IRA (couple filing).