AnnetteB6
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Retirement tax questions

After you have entered the information reported on your Form 1099-R, the follow-up questions are the key to reporting it as a direct rollover that should have no tax implications.  

 

As you mentioned, one of the first questions you see asks if the money was rolled over to a Roth 401(k) or 403(b) account.  If if was not put into a Roth account, you should select 'no' for this question.  Selecting 'yes' will make the distribution taxable to the extent that there were pre-tax funds in the account.

 

Then, the next question asks if it was rolled into a Roth IRA.  Again, you should answer 'no' if the money was rolled into a Traditional IRA account to preserve the nature of the pre-tax funds.  This 'no' answer is assuming that the 401(k) money that was rolled over simply went to a Traditional IRA or similar type of account.  There should be a message on the screen that explains this and even mentions that if it was rolled to a Traditional IRA you would answer 'no' even though it does not explicitly ask that question.

 

 

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