401K transferred to a Rollover IRA not listed as option in 1099-R questions

Forum|Forum|2 years ago
January 23, 2024
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I am having an issue where Turbotax is calculating that I owe a TON of taxes for a Pretax 401K total distribution to a direct rollover Fidelity Rollover IRA. In going through the 1099-R entry, I have two choices, a Roth 401K/403B or a ROTH IRA but what confuses me is all the choices are ROTH and not a Rollover option. If I select the Roth 401K it eliminate the taxes, but I don't understand this well enough to know if that is the right choice, and confused why TurboTax doesn't have a "Rollover IRA".

I should add that Box 7 has a G

Best answer by AnnetteB6

After you have entered the information reported on your Form 1099-R, the follow-up questions are the key to reporting it as a direct rollover that should have no tax implications.

As you mentioned, one of the first questions you see asks if the money was rolled over to a Roth 401(k) or 403(b) account. If if was not put into a Roth account, you should select 'no' for this question. Selecting 'yes' will make the distribution taxable to the extent that there were pre-tax funds in the account.

Then, the next question asks if it was rolled into a Roth IRA. Again, you should answer 'no' if the money was rolled into a Traditional IRA account to preserve the nature of the pre-tax funds. This 'no' answer is assuming that the 401(k) money that was rolled over simply went to a Traditional IRA or similar type of account. There should be a message on the screen that explains this and even mentions that if it was rolled to a Traditional IRA you would answer 'no' even though it does not explicitly ask that question.

A

AnnetteB6Answer

After you have entered the information reported on your Form 1099-R, the follow-up questions are the key to reporting it as a direct rollover that should have no tax implications.

As you mentioned, one of the first questions you see asks if the money was rolled over to a Roth 401(k) or 403(b) account. If if was not put into a Roth account, you should select 'no' for this question. Selecting 'yes' will make the distribution taxable to the extent that there were pre-tax funds in the account.

Then, the next question asks if it was rolled into a Roth IRA. Again, you should answer 'no' if the money was rolled into a Traditional IRA account to preserve the nature of the pre-tax funds. This 'no' answer is assuming that the 401(k) money that was rolled over simply went to a Traditional IRA or similar type of account. There should be a message on the screen that explains this and even mentions that if it was rolled to a Traditional IRA you would answer 'no' even though it does not explicitly ask that question.

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D

dmertz

Employee

By answering No to both questions that ask if the rollover was to some type of Roth account, TurboTax knows to treat the rollover as nontaxable.