I just filed my 2020 tax return yesterday and realized that I forgot to add a 1099-R that I received from my old 401k custodian. The 2a box (taxable amount) is $0, and Box 7 says the letter "G". I can't amend it right now in TurboTax. Questions are below

[melissaforpeace315]

1) Do I NEED to send a Amended tax return later on? What if I don't?

2)Based on your experience, is it highly likely that the IRS will send me a CP2000 in the future? 

I'm literally so scared that if they do send me the CP2000 and if I don't provide the necessary documentation (things that they accept), that something bad will happen

3) what do I need to provide in the CP2000 to ENSURE that everything is processed correctly?  Do I need to provide an account Statement from my new 401k custodian that proves that the money was indeed a Direct Rollover?

Any additional tips or advice would be greatly appreciated! 🙂

[macuser_22]

A 1099-R with a code G and zero taxable amount will have no affect on  your tax return. 

You might get an IRS letter from the IRS since the IRS will want to know that you did  not simply cash the check and not roll it over.   You can either amend and add the 1099-R or wait for the letter and send them an explanation  with a copy of the 1099-R and the 5498 form that you will receive from the bank that holds the IRA that shows the same amount was deposited to your IRA as a rollover or a copy of a bank statement that shows the same thing.

[melissaforpeace315]

@macuser_22 Ah!  Thanks so much for the helpful info you provided!  🙂  Will the 5498 come from my old 401k custodian, or the new 401k custodian that the money was rolled over into?

Do I include this with my Statement from my current 401k custodian, that states "Contribution-Rollover" on the Statement?   

Will the two documents above suffice?

[melissaforpeace315]

or what specifically does the new 401k Statement have to "include" or "say" for the IRS to approve this as acceptable documentation?

[macuser_22]

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@melissaforpeace315 wrote:

@macuser_22 Ah!  Thanks so much for the helpful info you provided!  🙂  Will the 5498 come from my old 401k custodian, or the new 401k custodian that the money was rolled over into?

Do I include this with my Statement from my current 401k custodian, that states "Contribution-Rollover" on the Statement?   

Will the two documents above suffice?

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My error - I was assuming (incorrectly) that you rolled it to an IRA.   Only IRA's issue a 5498, 401(k) plans do not.     You will just need an account statement from the new 401(k) that show the deposit.   

NOTE: that many taxpayers that roll form one 401(k) to another 401(k) receive an IRS letter whether they report the 1099-R or not on their tax return because the new 401(k) trustee does not issue any 5498 or notify the IRS in any way that the money was actually deposited in the other 401(k).   Recently the IRS has been asking for proof that it was actually deposited in the new 401(k).

[melissaforpeace315]

@macuser_22 oh no worries.  Sorry I'm sort of new with these 1099 things so I may have forgotten to mention details. Thank you for your response! So basically it's safe to assume that I will receive a CP2000 later this year that will ask for a Statement from my new 401k custodian, correct? And all I need to do is attach one document, which is the Statement itself right?

Now that I think of it, I did also rollover another one of my old employer's 401k plan into my Rollover IRA account as well. (for the year 2021)  So for this type of rollover (401k ---> Rollover IRA), I will need to include the 5498 from my Rollover IRA custodian AND the 1099-R from my old 401k plan AND a Statement from my Rollover IRA custodian (showing the exact amount rolled over)?  assuming we're talking about my 2021 tax returns now?  Also , it's safe to assume that I will get another CP2000 for this as well in 2022, correct?  After I file my 2021 taxes

[macuser_22]

Correct.  Amending may or may not head off the letters but there will be no penalty - just answer the letter with the information  that the letter asks for.

[melissaforpeace315]

@macuser_22 In my case where taxable amount is $0 (on the 1099-R)  for a Direct Rollover from my old 401k to my new 401k, do you think there will be a penalty?  I  thought penalties were only if people under report?  I don't think I under reported....I honestly just forgot that I had this 1099-R to add in my tax return. I wasn't trying to trick the government

[macuser_22]

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@melissaforpeace315 wrote:

@macuser_22 In my case where taxable amount is $0 (on the 1099-R)  for a Direct Rollover from my old 401k to my new 401k, do you think there will be a penalty?  I  thought penalties were only if people under report?  I don't think I under reported....I honestly just forgot that I had this 1099-R to add in my tax return. I wasn't trying to trick the government

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No.  There is no penalty or tax whatsoever.

[melissaforpeace315]

@macuser_22 Thank you so much for your help!