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How do I account for the pre-tax earnings (ordinary income) in Turbotax from an after-tax 401k contribution conversion to a Roth IRA?

I took a distribution of my after-tax contributions from my 401k and converted them into a Roth IRA contribution.  The earnings come out at the same time and are designated ordinary income.  I understand I need to pay taxes on this but I can't figure out how to account for this in Turbotax software.
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2 Replies
MaryK4
Expert Alumni

How do I account for the pre-tax earnings (ordinary income) in Turbotax from an after-tax 401k contribution conversion to a Roth IRA?

If they are designated Roth 401k contributions, they would have been included in your regular wages when you made the contributions so you would not have to report them now or separately.

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How do I account for the pre-tax earnings (ordinary income) in Turbotax from an after-tax 401k contribution conversion to a Roth IRA?

or

Assuming it was a standard 401k with some after tax contributions..?

 

The 1099-R form you enter into the software, should have box 2a lower than box 1....lower by an amount in box 5.   The box 5 amount would be the after tax contributions.....and the box 2a $$ will be the taxable income. 

 

 In the pages that follow the main 1099-R form page there will be page questions about whether you rolled it into another retirement account, where you will indicate the $$  were rolled into a ROTH IRA......how those questions are presented to you and answered depends on whether you are using Desktop or Online software, AND the code in box 7....  If it was a direct transfer with code G in box 7, the follow-up questions are pretty simple....if it was an indirect transfer with some other code in box 7.soemtimes the follow-up Q's can get a bit messier...but the roll-to-Roth IRA can still be indicated.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

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