IRA Indirect rollover

Forum|Forum|1 year ago
March 28, 2025
1 reply
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I’m having a problem filling out Turbo Tax for an indirect rollover. I rolled over a 401K to an IRA annuity. Fidelity, administrator of my 401K, wouldn't do a direct rollover for my IRA annuity. Fidelity sent me the check, making this an indirect rollover and necessitating the creation of a 1099-R. Turbo Tax is adding the total amount of the rollover to my income. How and where do I get Turbo Tax to subtract the amount? According to the IRS publications I’ve read and tried to understand, if it was a direct rollover, Fidelity wouldn’t have sent a 1099-R.

P.S. I'm 72 and 10 years retired

AnnetteB6

Try going back to where you entered the Form 1099-R. One of the follow-up questions should ask What Did You Do With The Money? and the answer choices are 'moved the money to another retirement account' or 'did something else'. Choose the 'moved the money to another retirement account' option and then select that it was 'rolled over'.

That should take care of removing it from your taxable income.

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janwithTTAuthor

Hi AnnetteB6,

I think my IRA rollover was actually a direct rollover. Here's more info.

1099-R form for my 401k rollover is filled out like the following:

1. has the full amount of 401K

2a. 0.00

2b. blank

3. 0.00

4. 0.00

5. 0.00

6. 0.00

7. G

IRA/SEP/Simple blank

Fidelity, the administrator for my previous employer's 401K, sent the check to me. The check read:

Pay to the order of: Minn Life TR IRA. Within 2 weeks, I sent the check, Minn Life received the check and my new IRA was opened. I received a paper from the Minn Life administrator stating Transaction Activity, Date, Rollover, plan type Individual Retirement Annuity, the amount of the check from Fidelity.

When I entered the 1099-R form info into TurboTax Premier, I do not get a question asking what I did with the money. I thought the "G" means a direct rollover from one IRA to another. The rollover has increased my income to 3 times my usual yearly income. I wonder if that increase is responsible for the government now wanting me to make quarterly estimated payments.

janwithTTAuthor

I left my former employer in 1994, but left my 401K funds there. Fidelity administers it now. Does Fidelity send information to the IRS about the amount in the 401K? I assume I did not have to inform the IRS. However now that the money is an IRA I will be sending in the year end IRA amount to IRS in my tax forms. Is this correct? I still am of the opinion that my rollover should not be added to my income, even though it's not adding to my tax amount. However I do wonder if that jump in "supposed income" is making IRS ask me for estimated quarterly payments.