There isn't a standared deduction associated with a retirement plan distribution. Your standard deduction is one amount that applies to all of your income.
I suggest you delete the entry for the rollover and re-enter it, as it doesn't seem you are seeing the correct screens in TurboTax. Based on the code in box 7, it should not show as taxable on your return. You will see a screen that says Rollover of 401(k) to Roth 401(k), you need to answer No on that screen, as you didn't transfer the funds to a ROTH IRA. There is another screen that asks if you transferred the funds to a ROTH IRA, you need to answer no there as well.
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