Discussion Forum

This forum is provided for informational purposes and it not intended to be relied upon as a source of investment, tax or legal advice. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of the 72tNET.com owners, or the sponsors or firms affiliated with the author(s). Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Please read our Forum Rules.

Refer to this template when submitting a new post https://72tnet.com/forum-template/. See the Tools and Resources menu for Distribution, Minimum Balance and First Modification Date calculators, current AFR rates, and other resources.

Edit your subscriptions by clicking on this link https://72tnet.com/community/subscriptions/ .

Turbo Tax Rounding issue causes inconsistent distribution amounts year over year  

Posts: 1
Active Member
Joined: 2 months ago

I have had a 72(t) plan for three years.  My 72(t) universe consists of two different IRA accounts.  In 2019, I took distributions from both accounts, and the total amount summed up to the required distribution in my plan.  When Turbo Tax performs the calculations, it is rounding the amount shown on each of the 1099-R forms, and then then adds the amounts together, resulting in a total that is $1 less than reported the prior two years.  An additional interesting note is that Form 5329 (Additional Taxes on Qualified Plans....) shows the correct distribution amount, but does not match the 1040 Line 4a amount.   A web search shows that there always is a lot of chatter regarding the rounding in Turbo Tax, and it seems to "round before adding", instead of " add,  then round".  Some say that I should fudge the distribution numbers so that they add correctly, but I am afraid that if I do that, the numbers I report will not match the 1099-R numbers reported by the institutions.    I don't want to bust a plan due to a rounding error in the tax form, although I don't think it is busted, just may flag an audit.   Thoughts?

Topic Tags
1 Reply
Posts: 42
Illustrious Member
Joined: 9 months ago

I would not be concerned about the rounding issue for $ 1.

I have never heard of any IRS audit issue caused by any rounding issue on SEPP 72-T, or any W-2 income or withholding or 1099 matching on Interest, Dividends, Capital Gains, or Retirement Plan distributions on 1099-R or SS benefits.

In addition, I am not aware that the IRS even  compares the SEPP 72-T distributions to the prior year, unless there is an audit for another reason. There has been a significant reduction in IRS agents, and I think less than 1/10 of 1% of individual 1040s are even audited.