All Posts

Hi,   It seems that there is a bug or a problem with TurboTax dealing with a 1099-R for a rollover of after tax contributions to a Roth IRA and their gain to a Traditional IRA.   Here is the a sample situation: In a 401k, long before 2025, over the years, contributed before tax $200,000 and after tax $10,000. The $10,000 after tax contribution resulted over the years in a gain of $60,000. In 2025: Retired. The 401k company rolled over the after tax contribution of $10,000 to a Roth IRA and the gain of $60,000 to a Traditional IRA. After tax contributions are not taxed when rolling over to a Roth IRA. Gains of after tax contributions are not taxed when rolling over to a Traditional IRA. Rolled over $40,000 from 401k to the Traditional IRA. In 2026, the 401k company provided a 1099-R with Box 1 - Gross distribution: $110,000, Box 2a - Taxable amount: $0.00, Box 5 - Employee contributions or insurance premiums: $70,000, Box 7 - Distribution code: G. The rest was empty or not checked.   Here are the steps to reproduce the problem: Start a new return for couple filing jointly. Add Social Security with Box 5: $40,000, that results in a Federal refund of $0. Add 1099-R with data from above 1099-R and click Continue. Is the IRA/SEP/SIMPLE box on this 1099-R checked? Check (x) No, the box is blank, click Continue. Did you move this money from a 401(k) to a Roth 401(k)? This includes rollovers from a regular 401(k), 403(b) or 457(b) plan to a designated Roth 401(k), 403(b) or 457(b) plan. Check (x) No, I didn’t, click Continue. Do any of these situations apply to you? Check (x) None of these apply, click Continue. Did you move the money to a Roth IRA? Check (x) Yes, this money was rolled over to a Roth IRA, click Continue. Note: There should be an option to specify the amount was rolled over to a Roth IRA. Did you make after-tax contributions to a 401(k) or 403(b) plan? This isn’t common but this is money you put in the plan yourself, not from your company. Check (x) Yes, After-tax contribution amount: preset to $70,000. Tried to change After-tax contribution amount to $10,000, the amount of after tax contributions, but it makes matter even worst. This results in a Federal Tax Due of $2,191 when the 1099-R should not have changed the Federal refund of $0 because all the moves involved for the 1099-R are non-taxable. ' Thanks in advance and looking forward to your response, George