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Soccer17
Returning Member

401(k) rollover to Roth IRA

We rolled over our 401(k) to a Roth IRA in 2019. But we received the check (not trustee to trustee) and rolled over to an IRA within the proper time frame. Were told we had to roll into a traditional IRA first and then that was rolled into a Roth IRA. Turbo Tax is showing both 1099's as taxable income on the worksheets, even though the 1040 reflects a "rollover" for one of them. What am I doing wrong?

2 Replies
macuser_22
Level 15

401(k) rollover to Roth IRA

Nothing.  Both are income.

 

It will show as income on the summary screen which shows gross income, not taxable income.

The IRS requires reporting all income on a *income* tax return - taxable and not-taxable.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
dmertz
Level 15

401(k) rollover to Roth IRA

"Were told we had to roll into a traditional IRA first and then that was rolled into a Roth IRA"

 

You were told wrong.  The distribution from the traditional account in your 401(k) is permitted to be rolled directly to either a traditional or Roth IRA.

 

You need to make sure that the Form 1099-R issued by the 401(k) plan reflects which of these you did.  If the amount in box 2a is zero and any amount in box 5 is less than the amount in box 1, then the Form 1099-R correctly reflects a rollover to a traditional IRA.  If the amount in box 2a is nonzero and equal to the difference between the amount in box 1 and any amount in box 5, the Form 1099-R is reporting a rollover directly to a Roth IRA and is incorrect with respect to the rollover having been deposited into a traditional IRA first.

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