I took a total distribution from my 401K in 2022 as a direct rollover Code G on 1099-R.
My 401K included both pre-tax and after-tax contributions I had made over the years.
I rolled the pre-tax contributions and earnings directly to a regular IRA.
I rolled the after-tax contributions directly to a Roth IRA.
Fidelity cut two checks directly to the custodian of the IRAs; one check for the regular IRA and one for the Roth IRA.
The 1099-R I received from Fidelity correctly shows in Box 1 the total distribution which was the sum of the two checks, and Box 2b is checked.
Box 2a Taxable Amount is Blank, which is correct as I understand this should not be taxable.
Box 5 shows the after-tax contributions which were rolled directly into the Roth IRA and matches the amount of the check to the Roth IRA.
So here's the problem, in TT Desktop there doesn't appear to be a way to separate the pre-tax to regular IRA from the after-tax to Roth IRA amounts.
I enter all the info from the 1099-R exactly, then if I answer Yes to this money was rolled over to a Roth IRA, then answer Yes to next question I made after tax contributions to this 401K, then the amount from Box 5 is pre-populated from my previous entries, then TT treats the ENTIRE distribution as taxable as if I had converted all the pre-tax contributions to a Roth IRA.
If I go to Forms view, to the Additional Distribution Information worksheet for that 1099-R, TT had checked line B5 that the Entire amount of the distribution was converted to a Roth IRA.
I can manually uncheck that line B5, and then fill in on line B6 only the amount of the after-tax contributions that were rolled to the Roth IRA, and that matches line B8 for previously taxed contributions (which had been pre-populated).
If I make those manual changes to the worksheet, TT correctly does not treat any of the distribution as taxable.
However, since this is a worksheet, I am assuming it does not get sent as part of my filed tax return.
So bottom line, my question is, using the normal TT step by step interview process, there appears to be no way to get TT to correctly calculate this unless for this 1099-R I answer a blanket NO to this money was rolled over to a Roth IRA.
So is this OK to do, and essentially not report anywhere on my taxes that some of that distribution on that 1099-R, namely the after-tax amount in Box 5, went to my Roth IRA?
