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How can I get turbotax to account for a traditional IRA withdrawal refunded and shown on Form 5498?

I withdrew $12,500 form a traditional IRA and replaced it within 60 days, as required.  The brokerage told me that there would be no tax consequence for this action.  The Form 1099-R submitted to the IRS shows $12,500 withdrawn.  They provided a Form 5498 showing the return as a rollover.  When I enter the Form 1099-R info into TurboTax it increases my tax burden by $3,125.  TurboTax tells me I can't enter Form 5498 data.  How do I get TurboTax to calculate the tax correctly?

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Alumni

How can I get turbotax to account for a traditional IRA withdrawal refunded and shown on Form 5498?

You have to enter the 1099-R correctly and then answer the questions following correctly. After you enter the 1099-R data as it is on your form, and click Continue, Turbotax will ask you if you rolled over any portion of the distribution. Answer appropriately (you did roll it over - back into the same account) then Turbotax will ask if you rolled it over into a ROTH IRA, answer No, and that should take care of it. The distribution will still show in your Income Summary, but it will not affect your tax. It will show on your tax return with the word ROLLOVER next to it and that is all that happens.
1 Reply
Alumni

How can I get turbotax to account for a traditional IRA withdrawal refunded and shown on Form 5498?

You have to enter the 1099-R correctly and then answer the questions following correctly. After you enter the 1099-R data as it is on your form, and click Continue, Turbotax will ask you if you rolled over any portion of the distribution. Answer appropriately (you did roll it over - back into the same account) then Turbotax will ask if you rolled it over into a ROTH IRA, answer No, and that should take care of it. The distribution will still show in your Income Summary, but it will not affect your tax. It will show on your tax return with the word ROLLOVER next to it and that is all that happens.