Reporting Traditional 401K to Roth IRA conversion

Forum|Forum|2 years ago
March 22, 2024
3 replies
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I got a 1099-R from Fidelity with Box 7 code of G for a conversion of the funds in a Traditional 401K to a Roth IRA when I changed employers. The entire distribution is marked taxable but TurboTax won't add it as taxable income to my return unless I enter a code of 2.

Since this would cause the entered 1099-R to differ from the received 1099-R, I'm wondering if there is some other way of having the income be reported for 2023?

Thanks

Best answer by dmertz

Entered properly, a Form 1099-R with code G in box 7, the IRA/SEP/SIMPLE bot not marked and the same amount in box 2a as is in box 1 will be included on Form 1040 line 5b with the ROLLOVER notation. Be sure to answered No to the question that asks if you rolled it over to a Roth 401(k) or Roth 403(b), then answer Yes to the question that asks if you rolled it over to a Roth IRA.

AmyC

Employee

The IRS also has a copy of the form. The IRS gets upset when you don't report income. They don't mind you reporting extra. So, you have two choices:

1. your method, change the 1099-R

2. enter it as other income with a description

Both methods work and it is your return so go with your gut. Keep your paperwork showing what happened forever (or 3 years after the money is gone).

To enter as other income:
1. go to the federal income section
2. scroll to the bottom
3. Miscellaneous Income, 1099-A, 1099-C, Start
4. Scroll to the bottom
5. Other reportable income, Start
6. Other taxable income?
7. Select YES
8. Description 401k rolled to ROTH
9. Amount, enter your amount
10. Continue

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SteamTrain

Employee

@unmesh59

I'm wondering if you imported that 1099-R or typed it in manually.....or perhaps failed to answer the required follow-up question telling the software it went into a ROTH IRA

I just entered one (windows desktop software) with just a code G, and all the $$ in box 2a was properly added to line 5b of the form 1040, with "Rollover" printed along-side of it. (Assuming box 2a was a positive non-zero number)

When entering it you do need to answer the follow-up questions to indicate it was rolled to a ROTH IRA.

(you do NOT indicate it was rolled to a Roth 401k, or Roth 403b on a page preceding that)

__________________________

I did the same thing for several years (Fidelity too) and never had an issue with it being properly reported on the TTX generated 1040.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*