Question

ESOP Rollover to Traditional IRA and getting penalized

Forum|Forum|5 years ago
March 20, 2021
1 reply
0 views

I just Retired end of last year and I'm over 65 and my company said I had to roll over my ESOP to IRA so I opened a traditional IRA and the money rolled over last year. Now people over 50, you can add up to $7K but I had a lot more put in and will next 4 years. Will I have to withdrawal money to get under $7K not to get penalized?

M

MAK70

No, if you roll your ESOP over to a traditional IRA, you do not pay tax or penalty because the contribution limits do not apply to rollovers.

B

BuzzTheMan2Author

Thank You for your answer but I must have something incorrectly entered.

TurboTax Deluxe is taking 6% penalty so what don't I have entered correctly?

M

MAK70

In TurboTax, you enter the 1099-R and the follow-up questions allow you to report as rollover. See Where do I enter an IRA rollover? - TurboTax.

If you have the 6% penalty, you will have to delete the entry n the Deductions & Credits section. Add to this post if you have any problems with the entry

@BuzzTheMan2