Reporting Roth Conversion (Traditional 401k to Roth IRA) in TurboTax Premier

Forum|Forum|1 year ago
January 29, 2025
2 replies
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In 2024, I moved money from traditional 401k to Roth IRA via traditional IRA. I received 1099-R from 401k company showing ONLY gross distribution amount and distribution code (G). I received a different 1099-R from IRA company showing gross distribution and taxable amount (same number) and distribution code of 7 to show money moving from traditional IRA to Roth IRA. So far, all this makes sense but where to enter this data in TurboTax is somewhat confusing. I entered both 1099-Rs in the 1099-R/IRA Income section under Retirement Plans and Social Security? The total amount in this section seems to be inflated since TurboTax is adding both distribution amounts from 401k and the same amount (plus a small amount of interest) from the IRA conversion. It's as though the amount being converted is counted twice as 1099-R income in TurboTax. Is this correct/accurate or do I need to explicitly show the IRA conversion somewhere else in TurboTax? Thanks for your help.

Best answer by JohnB5677

No, You should be taxed on the portion rolled into the ROTH.

It sounds like your familiar with the posting process, so I'm going to jump ahead.

On the 1099-R from 401k company showing ONLY gross distribution amount and distribution code (G).

Select the pencil to edit the 1099-R
Continue to the interview
Do you have info in Box 2a or Box 2b? - No
Do any of these situations apply to you? - None of these apply
Did you move the money to a Roth IRA? No
Double check Box 7 and the IRA box on your 1099-R - This is correct
Did you make after-tax contributions to a 401(k) or 403(b) plan? - No
This will show as not taxable

For the 1099-R from IRA company showing gross distribution and taxable amount.

This will show as taxable as you've already posted it.

@Peter461 Line 5 corrected to No

JohnB5677Answer

No, You should be taxed on the portion rolled into the ROTH.

It sounds like your familiar with the posting process, so I'm going to jump ahead.

On the 1099-R from 401k company showing ONLY gross distribution amount and distribution code (G).

Select the pencil to edit the 1099-R
Continue to the interview
Do you have info in Box 2a or Box 2b? - No
Do any of these situations apply to you? - None of these apply
Did you move the money to a Roth IRA? No
Double check Box 7 and the IRA box on your 1099-R - This is correct
Did you make after-tax contributions to a 401(k) or 403(b) plan? - No
This will show as not taxable

For the 1099-R from IRA company showing gross distribution and taxable amount.

This will show as taxable as you've already posted it.

@Peter461 Line 5 corrected to No

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dmertz

Employee

All distributions from retirement accounts are considered to be "income" under the tax code, but only the Roth conversion is taxable income in this case. The rollover from the 401(k) must be included on Form 1040 line 5a but excluded from line 5b. The Roth conversion will be included in taxable income on line 4b.