How do I pay taxes for rolling a 401k to a Roth IRA account?

[josh-p1]

I rolled over a traditional 401k from my previous employer into a Roth IRA account and was not charged for the taxes on the rollover. On my 1099-R from the 2B(Taxable amount not determined) is not checked and box 2a is at $0. Box 7 has the distribution code G (Direct rollover and direct payment). I know I need to pay income tax on that amount to convert it to a Roth account but I don't know how to see that Turbotax calculates that properly and how to fix the situation. Do I need to fix this situation with the sender or receiver?

[macuser_22]

Did you instruct the 401(k) plan administrator that this was a Roth conversion of did you decide to put it in a Roth after the check was issued?

Assuming that it was a check and not an electronic transfer, the check should have been payable to your Traditional IRA account if the box 2a is zero.   If payable to your Roth IRA then box 2a should be the same as box 1.

[josh-p1]

It was a direct rollover so it was transferred electronically. It seams they weren’t talking and didn’t ask questions on either end. I see now that I should have made it a two part move. From 401k to traditional Ira then from traditional ira to Roth IRA. Now after the fact I’m not sure what to do.

[macuser_22 · Accepted solution]

Are you sure that it is in a Roth and not a Traditional IRA?

You should discuss this with the 401(K) administrator if they directed it to go to the wrong type of IRA.

However, It is doubtful that they will change it, but you need to talk with them anyway just to tell the IRS that you attempted to get them to correct it.

You can ignore the 1099-R and enter a 4852 substitute 1099-R exactly like the one you have but make box 2a the same as box 1.   Enter an explanation statement that you are using a substitute because the rollover went to a Roth IRA and not a Traditional IRA so the box 2a should not have been zero.   Then explain the steps you took to get the 401(k) administrator to issue a corrected 1099-R.

That should make it a taxable Roth conversion.