Yes, it needs to be accounted for, and based on the facts above it should be a non-taxable transaction.
The tax impact will be $0, if t
he Traditional 401K was rolled to a Traditional 401K.
If the money was rolled into a Roth 401K it is taxable.
Double check this to see what it was rolled over to. Also, make sure the code in box 7 is entered correctly.
After the 1099R is entered, TurboTax will then ask you questions regarding it, to determine the correct tax on it.
It will go under:
Federal Taxes
Wages and Income
Retirement Plan and Social Security
IRA, 401K, Pension Plans (1099R) you will click add or update.
Make sure to carefully answer the questions following the 1099R entry. Especially as to what type of retirement account it was rolled over to.
