1099-R as income?

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Hello, I received a 1099-R after my previous employer offered a one time rollover of a retirement plan. I received that distribution and rolled it over into a traditional IRA. When doing my taxes it pops up that it counts as income even though I didn't physically keep any of the money? Is that correct?

VolvoGirl

Level 15

If you are looking at a summary screen or review screen those show the full amount as income and lump a lot of stuff together. You need to check the actual 1040 form and make sure it's right.

If you rolled it over it should say Rollover to the left of the taxable amount on 4b or 4d. For 2019 IRA distributions show up on 1040 line 4a and the taxable amount on 4b. Pensions, 401K and Annuities go on lines 4c & 4d.

Was there any withholding taken out? If you rolled it over and had taxes withheld, you needed to add the withholding back in (from your own money) when you deposited it into the new account OR the withholding will become a taxable distribution itself.

VictoriaD75

Alumni - Intuit

@VolvoGirl explained perfectly how a rollover will affect your tax return. Let me walk you through the TurboTax screens to get it entered properly.

Follow these steps to enter your rollover distribution:

Under the Federal menu, choose Wages & Income
Expand the menu for Retirement Plan and Social Security
Click Start/Revisit next to IRA, 401(k), Pension Plan Withdrawals (1099-R)
Answer YES to Did you have any of these types of income in 2019? Click Continue.
On the following screen you may either import the 1099-R or choose I"ll type it in myself
Enter the information exactly as shown on the 1099-R. Pay attention to the distribution code in box 7. If it is G, this indicates a Direct rollover and rollover contribution. Check to see if the IRS/SEP/SIMPLE box is checked. Click Continue.
On the screen, What Did You Do With The Money, check Moved the money to another retirement account (or returned it to the same retirement account).
Another question will appear, if you rolled over the entire funds, choose the first option, rolled over all of this money to another traditional IRA or other retirement account (or returned it to the same account). Click Continue.