401k rollover problems

Forum|Forum|3 years ago
February 24, 2023
2 replies
1 view

My wife retired last year. We instructed her company to roll over her 401k to our credit union in the form of a 14 month CD (IRA) in the amount of $10891. When we filed our taxes, I neglected to include the 1099R which showed the amount as a total distribution (box 7 indicated a "G"). Several tax attorneys have told us that there is no limit on the amount.

I noticed after I filed that TurboTax used a $7000 deduction that I didn't claim and assessed a penalty for the difference between the $10891 and $7000.

When I tried to fix this via an amended return, our federal refund went from $4009 to a fee of $200 and out state refund went from $4398 to zero.

How can I rectify this? I understand that our refunds will decrease a bit (due to the $7000 deduction going away), but why would they totally disappear?

Thanks for your help!

SantinoD

Level 6

It would be helpful to have a TurboTax ".tax2022" file that is experiencing this issue.

You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, here are the instructions:

Go to the black panel on the left side of your program and select Tax Tools.

Then select Tools below Tax Tools.
A window will pop up which says Tools Center.
On this screen, select Share my file with Agent.
You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number.
Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

Opus 17

Level 15

A rollover is not a contribution and they don't have the same limits. Turbotax treated the money as a contribution, and applied your $7000 limit.

Did you perhaps enter $10891 as a contribution to your wife's IRA? That would have given you a $7000 tax deduction and a large penalty. Removing the $7000 tax deduction would definitely cause your income tax to increase, although the amounts you cite seem larger than I would expect.

The $10891 should not have been entered as a separate contribution. The only place it should have been entered is with the 1099-R code G. Turbotax would either assume it was a rollover, or would ask you if it was a rollover and you would confirm that fact. You don't separately report any IRA contributions, because the rollover is not a contribution. As noted, however, we can't say for sure without seeing your return. No one on this board can see your return, but official customer support can see it if you share a token number.