This is our 401K situation:
1. On March 27, 2020, the IRS ruled that, due to the pandemic, the IRS is not requiring a minimum distribution from an IRA. The IRS gives a taxpayer 60 days within which to rollover 401K money to an IRA.
2. On June 3, 2020, we took out money from our 401K. Fidelity took 20% out for taxes and paid it.
3. On June 9, 2020, we called Fidelity and told them to cancel the take out money. We had Fidelity put the money into an IRA. That was well within the 60 day period within which we could rollover the money into an IRA.
4. The IRA is sitting in our joint account at Fidelity, On June 11, 2020, we established our IRA.
5. Because the 1099-R shows the number 7 in Box 7, which we do not want. TurboTax will significantly increase our AGI and Social Security will reduce our monthly checks.
6. We live totally on social security.
7. We asked Fidelity to correct the error and issue us a CORRECTED 1099-R.
8. When I was preparing our taxes, I learned from TurboTax that on March 27, 2020 that the IRS ruled on the distribution issue due to the pandemic. In June, Fidelity never informed us so we could have a choice.
9. It was a direct rollover because we were within the 60-day period within which to rollover from a 401K to the IRA. One week lapsed.
