dmertz
Level 15

Retirement tax questions

1.  Indirect rollovers are entered into TurboTax by entering the Form 1099-R that reports the distribution from the original retirement account and in the follow-up indicating that the money was moved to another retirement account (or returned to the same account), then indicating how much of the distribution was rolled over.  The gross amounts of all Forms 1099-R will be included on 2019 Form 1040 line 4a but amounts reported as rolled over will be excluded from the taxable amount on line 4b.  Only the amount on line 4b adds to your taxable income.

 

2. If the multiple cash withdrawals were from IRA accounts rather than from a qualified retirement plan, it appears that you have violated the statute that limits you to one IRA-to-IRA rollover in any 12-month period.  Deposits after the first one, those that that violate this rollover limitation, are excess contributions subject to penalty. The limitation is on the number of distribution eligible for rollover, not on the number of rollover contributions (deposits).  Distributions from an IRA are indicated by either having the IRA/SEP/SIMPLE box marked (for a traditional IRA) or by code J, T or Q in box 7 (for a Roth IRA).  TurboTax does not enforce the limit on the number of distributions eligible to be rolled over, so it's possible in TurboTax to report amounts as rolled over when they were, in fact, not permitted to be rolled over.  Distributions from a qualified retirement plan like a 401(k) and distributions from a traditional IRA being converted to a Roth IRA are not subject to this rollover limitation.