It depends on where it is showing up as taxable. It shouldn't. Here is a way you can really tell if it is taxable or not.
- If you are working in Turbo Tax online go to:
- Tax Tools
- Tools
- Preview my 1040
- Look at Lines 5A and 5B. 5A should have an amount recorded with the notation rollover in the box but nothing should be reported in Line 5B.
- If you are working in the software, go to the forms mode and then look at the 1040.
if there is still an amount in Box 5B, you may have rolled this amount into a Roth account. If this is the case then the amount is fully taxable because you are moving money from a tax-deferred plan into a plan funded solely with after-tax dollars.
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