The direct rollover and the withdrawal should be reported on separate forms 1099-R. Only the withdrawal is taxable.
The direct rollover is not taxable. This is how you enter the 1099-R for the rollover.
Enter your form 1099-R by following these steps:
- In TurboTax, open your tax return
- Click on Federal in the left-hand column, then on Wages & Income on top of the screen
- Scroll down to All Income, locate the section Retirement Plans and Social Security and click on Show more
- Click Start next to IRAs, 401(k), Pension Plan Withdrawals (1099-R).
After entering your form 1099-R, click Continue until you reach the screen Tell us if you moved the money through a rollover or conversion. Check the radio button which corresponds to your situation then click Continue and follow the interview. The rollover amount will be excluded from taxation.
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