Question

On this 1099R form for Mary. Why is it computing taxes owed state and federal? This was transferred from a 401 k to a roth 401 K totally.

Forum|Forum|5 years ago
April 21, 2021
2 replies
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the misstake on the 1099 R form appears to be that they checked the box 2b for total disbursement. should that not be checked?

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BillM223

Contributions to a Roth account (whether IRA or 401(k) or whatever) are not tax-free; that is, they must be included in your income.

However, the amount already in your traditional 401(k) plan is pre-tax, i.e., this amount was removed from income at the time you made the contribution.

Thus, when you transfer amounts from a traditional 401(k) plan to a Roth 401(k) plan, you must add these amounts to federal and state income. Did no one explain that to you when you made the transfer?

The check box for total distribution does not affect this situation.

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regalduffyAuthor

She made the transfer in 2020and reported it then. The IRS went through my taxes kSt year and I ended up owning a lot. That Ll took place in 2020. A q099 R roll over was done then.

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regalduffyAuthor

The first box was checked which means the federal taxes were not determined by Wells Fargo my wife came up with that. The second box was not checked which would have signaled total distribution. I read the instructions on the 1099 R.