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June 5, 2019
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I had after tax money in my 401k ($60k contrib and $30k gain). I directly rolled over the 60k to roth IRA and 30k to traditional IRA. Do I need to pay tax on the 30k?

  • June 5, 2019
  • 5 replies
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Best answer by macuser_22

Assuming a single 1099-R with a code G in box 7, zero in box 2a and the after-tax amount that went to a Roth in box 5:

TurboTax does not directly support a single 1099-R going to two different destinations.

What you must do is split the 1099-R into two 1099-Rs.

For the amount rolled to the Traditional IRA.

1) In box 1 use the original 1099-R box 1 minus the box 5 amount.

2) Box 2a = 0.

3) Box 5 = blank.

4) Box 7 = G.

5) Answer NO to the two interview questions that ask about a Roth - the default is a Traditional IRA.

For the amount rolled to the Roth IRA.

1) In box 1 enter the original box 5 amount.

2) Box 2a - 0.

3) Box 5 = original box 5 amount.

4) Box 7 = G.

5) Answer NO to the first interview question about a 401(k) Roth and YES to the rollover to a Roth IRA.

That should properly report the 1099-R. The box totals of the two 1099-R should equal the amounts on the original 1099-R.

Nothing about splitting into two 1099-R's go on a tax return - the IRS only gets the dollar amounts on the 1040 form.

5 replies

macuser_22
Employee
June 5, 2019
Is the after tax money in box 5 on the 1099-R?
What code is in box 7?
Is box 2a zero?

If so, then this must be entered in a special way as TurboTax does not directly support this situation.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Hal_Al
Employee
June 5, 2019
You can do a rollover between a regular 401(k) and a Roth IRA, but it requires that you make a stop at a Traditional IRA (TIRA) first. You do a 401(k) rollover, to a TIRA first. Then you do a Roth IRA conversion.

So, how you handle it depends on what's on the 1099-R(s). A Roth conversion is taxable
macuser_22
Employee
June 5, 2019
If the 401(k) had a mix of before and after-tax money and the after-tax is in box 5, then the before tax money can be transferred directly to a Traditional IRA and the after-tax (amount in box 5), transferred directly to a Roth IRA.   Neither will be taxable.  The 401(k) after-tax money would not be transferred to a Traditional IRA.

Assuming that this was reported on a single 1099-R, which is very common,  I will post the procedure below.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
SDHoustonAuthor
June 5, 2019
Yes, after tax money in box 5, code is G and box 2a is 0
macuser_22
Employee
June 5, 2019

Assuming a single 1099-R with a code G in box 7, zero in box 2a and the after-tax amount that went to a Roth in box 5:

TurboTax does not directly support a single 1099-R going to two different destinations.

What you must do is split the 1099-R into two 1099-Rs.

For the amount rolled to the Traditional IRA.

1) In box 1 use the original 1099-R box 1 minus the box 5 amount.

2) Box 2a = 0.

3) Box 5 = blank.

4) Box 7 = G.

5) Answer NO to the two interview questions that ask about a Roth - the default is a Traditional IRA.

For the amount rolled to the Roth IRA.

1) In box 1 enter the original box 5 amount.

2) Box 2a - 0.

3) Box 5 = original box 5 amount.

4) Box 7 = G.

5) Answer NO to the first interview question about a 401(k) Roth and YES to the rollover to a Roth IRA.

That should properly report the 1099-R. The box totals of the two 1099-R should equal the amounts on the original 1099-R.

Nothing about splitting into two 1099-R's go on a tax return - the IRS only gets the dollar amounts on the 1040 form.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
SDHoustonAuthor
June 5, 2019
thank you so much