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401k withdraw repayment - First Home buy cancelled

Forum|Forum|5 years ago
February 15, 2021
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I got 10k from my IRA to use as a down payment as we qualify as first time home buyers.

The deal did not go through and I paid the 10k back after 20 days.

I received a 1099-R and a 5498. How do I report the 5498? TurboTax is saying that I couldn't have contributed the 10k because it's above the contribution limit and I have to withdraw to avoid a 6% penalty on the amount that exceeds the contribution limit

Best answer by ErnieS0

Do not enter the repayment amount from your 401(k) in the IRA contribution section. You did a rollover. You rolled money back into your 401(k) that you withdrew. It is not taxable because you did this within 60 days.

Everything is handled in the 1099-R section.

Go to Enter your 1099-R details from [your 401(k) provider]. Continue.
Keep going until you see a screen Tell us if [You] moved the money through a rollover or conversion
Select I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days)

You distribution will show as a nontaxable rollover on your tax return.

E

ErnieS0Answer

Do not enter the repayment amount from your 401(k) in the IRA contribution section. You did a rollover. You rolled money back into your 401(k) that you withdrew. It is not taxable because you did this within 60 days.

Everything is handled in the 1099-R section.

Go to Enter your 1099-R details from [your 401(k) provider]. Continue.
Keep going until you see a screen Tell us if [You] moved the money through a rollover or conversion
Select I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days)

You distribution will show as a nontaxable rollover on your tax return.

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R

RLG3Author

Thank you, Ernie. Just to confirm, should I ignore the 5498 (not fill it separately) and use just the info at the 1099-R?

A

AnnetteB6

Yes, use only the information from your Form 1099-R on your tax return unless you are specifically asked to enter the information shown on Form 5498.

In general, Form 5498 is only used for your information and should be kept with your tax records. It is not entered into your tax return unless the information reported on that form is needed (and then it will be requested).

For more information, take a look at the following TurboTax article: What do I do with Form 5498?

@RLG3

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