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Level 1

HELP! Rolled over 401k money from previous employer to current employer but something isnt checking out correctly.

I rolled over 401k money from my two former employers 401k to my current employer's 401k in 2017.  I received two 1099-R.  Gross distribution of $80k (taxable amount is 0) for one employer and $63k (taxable amount is 0) for the other employer.  Total distribution box is checked on both 1099-Rs.  

My income for 2016 and 2017 is about the same.  

As I am entering my expenses for my two rental properties (same rental properties in 2016 and 2017), I noticed my refund going up.  When I get to my expenses on the second rental property, as I enter expenses, my refund does not move.  Strange, because it did in 2016.  It's almost like I hit a cap and it is not giving me a higher refund.   

Something is not correct.  So when I finish up my income section, it compares a picture of my 2017 income with my 2016 income.  In 2017, it is adding the $143k that I rolled over from former two employer's 401k to current employer's 401k and calling it "pension - non taxable" which greatly increases my income.  Is this supposed to happen?  It's a 401k rollover and isn't taxable, like it is categorized but for some reason, it is still adding to my total income picture.  Is that why my rental property expenses are not moving my refund needle at all?

2 Replies
Level 20

HELP! Rolled over 401k money from previous employer to current employer but something isnt checking out correctly.

"Is this supposed to happen?"

Yes, any distribution from a retirement account is considered to be income.  However, being nontaxable income in this case, it has no effect on your tax return other than to appear on Form 1040 line 16a to indicate that you reported the income as nontaxable.  It has absolutely no effect anywhere on your tax return other than simply appearing on line 16a.  You can verify this by temporarily deleting the Form 1099-R or by temporarily changing the 1099-R form's box 1 amount to zero.

Level 1

HELP! Rolled over 401k money from previous employer to current employer but something isnt checking out correctly.

I’m still curious as to why adding my expenses for my rental properties stop adding to my refund?