2021 was the first year we had the ability to do an additional 10K of contribution to our 401k plan at work. It is after-tax of course, and Fidelity added the auto-sweep feature to roll/recharacterize it as Roth.
So then I did receive the 1099-R with a code G in box 7, the referenced amount in box 1, a zero amount in box 2a and the same referenced amount of non-deductible (after-tax) in box 5.
Software took it all in and all is good except for one thing that confuses or worries me. That 1099-R amount, which was simply recharacterized as Roth within the 401k, was treated by the software as income for the year lifting my total income by that amount. It DID NOT tax the amount, no worries there, but instead of INCOME for the year, the software totaled things as INCOME+1099-R. This may not matter, but it will be confusing historically. So basically I dumped AMOUNT from my paycheck into the new 401k plan feature, and Turbotax is treating it as a distribution for the year ADDING it to my total income from whence it actually came.
Just tell me this doesn't really matter so I can hit send on the E-file.
ADDING:
Looking at the forms view I think I can see expected income numbers, so to add more specific wording to this issue; I think the inflated income only appears in the Federal Review Tax Summary. So basically the "GUI" is treating the 401k to 401k rollover as income distribution but the overall forms may be fine. Still looking...
