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I received a 401K 100% distribution ($65K) when I left my employer and opened and IRA. Now TT is telling I have a penalty for excess IRA contribution. How can I avoid it?

Forum|Forum|7 years ago
June 4, 2019
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TurboTax Home & Biz Windows

Best answer by SteamTrain

Sounds like you entered it as an IRA "Contribution" on the Deductions&Credits page. It was not a "contribution". Go back to that section and take those $$ out.

You enter the details about it being rolled into an IRA during the follow-up questions when you enter the 1099-R on the Wages&Income page. You don't enter that rollover anywhere else but when you put in the 1099-R.

SteamTrainAnswer

Employee

Sounds like you entered it as an IRA "Contribution" on the Deductions&Credits page. It was not a "contribution". Go back to that section and take those $$ out.

You enter the details about it being rolled into an IRA during the follow-up questions when you enter the 1099-R on the Wages&Income page. You don't enter that rollover anywhere else but when you put in the 1099-R.

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

SteamTrain

Employee

When done, make sure the $$ don't show up on line 4b of your form 1040. The only $$ that show up on line 4b would be any amount from the distribution that you did not roll into the IRA if you didn't put it all in there (if taxes were withheld on the distribution...you needed to make those up, otherwise those $$ are taxed (and penalized ….depending on your age)

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