Hello, I spoke with a customer service representative for the 401K administrator. After some research, she told me there was no need for them to issue a new 1099R because the original 1099R is still correct with the pre-tax $ rolled over to a traditional IRA and after-tax 401K $ rolled over to a Roth IRA, and distribution code G on box 7. I have another traditional IRA (separate from the one above) which I rolled over some money into another Roth IRA in 2022 and 2023 (in 2023 I rolled over $40,000 that was taxable, with $90,000 total for 2022 and 2023). So I have to use form 8606 to report this traditional IRA to Roth conversion. Without the amounts related to the 401K partial distributions in question, the 8606 shows no data on page 1, $40,000 on line 16 and 18 of page 2, and also $40,000 on line 4a and 4b (taxable IRA) of 1040.
For the 1099R data on the 401K partial distributions that was initially sent to me:
Box 1 gross distribution - $200,000 (out of total amount $250M in 401K)
Box 2a taxable amount – blank; box 2b taxable amount not determined unchecked
Box 5 employee contributions (portion of my after-tax contribution?) - $400
Box 7 distribution code - G with IRA/SEP box unchecked
When I used Turbotax to input this 1099R, the input screen asks
“Was this money rolled over to a Roth IRA?” – I selected “Yes”, because $400 of the $200,000 went into a Roth IRA.
“Did you make any after-tax contributions to your 401K plan?” – I selected “Yes”, since $400 was after-tax dollars from over-contribution to the 401K through payroll deduction
“after-tax contribution to 401K” box on the next screen – shows $400 (from the screen that I first typed in the 1099R data)
Then I checked “no” for public safety officer, and then checked the button for “other qualified IRA distributions”
TurboxTax went back to the “Your 1099R Entries” screen that shows a listing of the 1099Rs, now it appeared to show I owed tax on the entire $200,000 (even when I input code G as shown on the 1099R). It doesn’t provide input screen for me to further indicate $199,600 went into traditional IRA (not taxable), and $400 was after-tax that went into Roth (also not taxable). So I clicked “continued”
“Any non-deductible contributions to IRA?” – I clicked “yes” (if clicked “no”, the input for this section ended)
“total basis as of 12-31-2022” – I clicked “no” since my 8606 for 2022 was blank on page 1, the only amount was shown on line 16 and 18 for Roth conversion.
“value on traditional IRA as of 12-31-2023” – I put in $600,000, which were the total values of this 401K conversion ($200,000 minus the $400 Roth) plus the other traditional IRA that I have.
TurboTax ended the input section and took me back to the “income” section, and it shows I owed tax on the entire $200,000, which $199,600 went into traditional IRA (non-tax) and $400 went into Roth (non-tax because $400 was after-tax 401K contribution).
What did I input incorrectly, and how should I input this 1099R to TurboTax?
