401k rollover

[vze56v6x]

At the start of 2022, I started a new job and at the time I rolled over my 401K from 1 account to another account. I received a 1099-R and the code does show it was a rollover. But I noticed turbo tax is adding this to my income and causing my income to appear to be $60K more than.   For example  - 2022 wages and salaries are about $195K and adding this 401K rollover of $60K causing my income to reflect as over $250K.  

Am I being taxed for the 401K roll over? Why does it show up at all if it was rolled over?

Is this income of $250k the reason why i cannot take any deductions for my childs college tuition and expenses?

[AnnetteB6]

It all depends on where you are seeing that TurboTax is adding the rollover to your income.  Since technically there was a distribution made from the 401k and it was reported on Form 1099-R, some of the summary screens within the program will add that money to your 'income'.  That does not necessarily mean that it is being included as income on your actual tax return.  

To be certain whether or not you are being taxed on the rollover, you need to take a closer look at your actual tax return.  When you take a look at your Form 1040, the Form 1099-R distribution amount will be shown on line 5a.  You should also see the word 'rollover' underneath that line.  Then, if any of the rollover is being taxed and included in your taxable income it will be shown on line 5b.  

If you see that there is a taxable amount on line 5b, then you should revisit the Form 1099-R section to verify your entries and verify that the follow-up questions were answered accurately.

If the amount on line 5b is zero or blank, then the rollover distribution has no bearing on the education credit calculation.  There is something else making you ineligible for that credit.

You can preview your Form 1040 if you are using TurboTax Online.  Use the following steps while working in your tax return:

• In the navigation area on the left side of your screen, click Tax Tools to expand your choices
• Click Tools, which will open the Tool Center
• Click View Tax Summary under “Other Helpful Links…”
• Click  Preview My 1040 to see your actual tax form

If you are using one of the CD/downloaded versions of TurboTax, click the Forms button in the upper right corner of the screen to go to Forms Mode where you can view Form 1040 or any other form that is included as part of your return.  Once you are in Forms Mode, click the form name in the list on the left side of the screen.

[MB001]

Replying to concerns and questions I have found over last 3 years... I have two years' taxes to review where the rollover reported via a 1099R added to the Gross Adjusted Income.  Like others' questions, I have the same concern that this added income disqualified our return from expected credits and deductions.

Why will this not be considered income again, counted twice, when we actually withdraw it in retirement?

MAB

[dmertz]

What matters is taxable income, the amount reported on line 5b.  The amount reported on line 5a is not involved in any of the calculations on your tax return.  The amount on line 5a is only there to help the IRS determine if you have reported all of your Forms 1099-R.  If the amount on line 5b is incorrect, either the payer reported something incorrectly on the Form 1099-R or you've entered something incorrectly into TurboTax.

[VolvoGirl]

And what code is is box 7 on the 1099R 401K rollovers?  Or what did you rollover and to where?  A proper rollover should be on 1040 line 4a or 5a and no taxable amount on line b with the word Rollover by it.