Question

Turbotax issue with 401K transfer to traditional IRA

Forum|Forum|2 years ago
April 14, 2024
1 reply
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Looking for help on an issue I'm having on getting my taxes finsihed so I can submit it through Turbotax before Monday the 15th. I did post a question elsewhere, but what I was told by one of the experts on here (John) didn't quite work the way he said it would. I took $12K out of my employer run 401K and transferred it in less than 30 days to a Gold IRA (traditional not Roth). I was told that once I do all the steps, including adding all the 1099-R info that I would be asked what I did with the money, but all Turbotax did not... All it asked me was whether I transferred it to a Roth IRA, which I didn't it was transferred to a traditional IRA. For this reason, Turbotax is saying I will pay a penalty. Any suggestions on what I may be doing wrong?

VolvoGirl

Employee

What code is in box 7? Did they take any tax withholding out of it? Say NO to transferring to a ROTH or skip that. It only needs to know if you transferred it to a ROTH, otherwise it's to a Traditional IRA.

Pick I moved it to another retirement account even if you put it back into the same account.

Then choose - I did a combination of rolling over, converting or cashing out the money

If they took out taxes did you replace the taxes when you put it in the IRA? Otherwise the tax will become a distribution itself and taxable and a 10% Early Withdrawal Penalty if you are under 59 1/2.

AND do NOT enter it again under Deductions as a new IRA contribution! A Rollover is not a new contribution.

N

norse1957Author

Thank you for the reply. In box 7 the code given on the 1099-R was "G", and zero paid on taxes. I'll try and do what you are suggesting though, and come back here to let you know if I'm still stuck.

VolvoGirl

Employee

Oh that's all you do. Code G means direct transfer. Just say no it's not to a Roth. There should be no tax or penalty. It should show up on 1040 line 5a and 0 taxable on line 5b with Rollover written by it.