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Level 1
posted Feb 27, 2022 6:57:45 AM

How to enter1099-R that combines 2 direct rollovers to IRA and Roth IRA

Last year I did two direct rollovers from my 403(b) six months apart. The first went to my IRA and is nontaxable. The second went to my Roth IRA and is taxable (as a partial conversion?). I received one 1099-R that combined these two transactions with the total amount of both rollovers in Box 1. The taxable amount, that went to the Roth IRA, was correctly entered in Box 2a. The Box 7 code is G.  When I tried to enter this single 1099-R in TurboTax, it did not treat the differing taxable/nontaxable amounts properly. Therefore I asked the payer who issued the combined 1099-R to instead send me two 1099-R's, one for each distribution. They refused.  So is there a way for me to enter this 1099-R in TurboTax so that the two rollovers are treated properly?

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1 Best answer
Expert Alumni
Feb 27, 2022 7:19:42 AM

You are correct, you want to enter it as two separate 1099-Rs. Even though they will not supply you with two, you can still enter it that way in TurboTax, one for the rollover to the traditional IRA and one for the conversion to a Roth. As long as the total and distribution codes match, this will not cause a problem:

  1. Go to Federal > Wages & Income > Retirement Plans & Social Security > IRA, 401(k), Pension Plan Withdrawals (1099-R) and click Start / Revisit.
  2. Add your 1099-R with all the information the same, except the distribution exactly as it is reported to you. Start with the portion that you converted to a traditional IRA. Do not enter any of the taxable amount on this 1099-R. Keep the Box 7 Code G. 
  3. Confirm whether or not the IRA/SEP/Simple box is checked.
  4. After a few more screens, Tell us if you moved the money through a rollover or conversion select I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days) for the portion that you rolled over into a traditional IRA. 
  5. Confirm the entire amount was rolled over. You should not be taxed on the rollover.
  6. Repeat with the portion of the distribution that was converted to a Roth IRA. Add the Box 2a taxable amount to this distribution. After entering the information and going through the same few screens, you will get to Did you move the money to a Roth IRA? Select Yes, this money was rolled over to a Roth IRA. 

You will be taxed on the Roth conversion but will not pay the additional penalty for an early withdrawal. On your Form 1040, you should see the entire amount from the 1099-R in box 5a and the taxable amount that went into the Roth IRA in box 5b and ROLLOVER indicated. To preview Form 1040:

  1. Open or continue your return.
  2. Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
  3. With the Tax Tools menu open, you can then view your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu

2 Replies
Expert Alumni
Feb 27, 2022 7:19:42 AM

You are correct, you want to enter it as two separate 1099-Rs. Even though they will not supply you with two, you can still enter it that way in TurboTax, one for the rollover to the traditional IRA and one for the conversion to a Roth. As long as the total and distribution codes match, this will not cause a problem:

  1. Go to Federal > Wages & Income > Retirement Plans & Social Security > IRA, 401(k), Pension Plan Withdrawals (1099-R) and click Start / Revisit.
  2. Add your 1099-R with all the information the same, except the distribution exactly as it is reported to you. Start with the portion that you converted to a traditional IRA. Do not enter any of the taxable amount on this 1099-R. Keep the Box 7 Code G. 
  3. Confirm whether or not the IRA/SEP/Simple box is checked.
  4. After a few more screens, Tell us if you moved the money through a rollover or conversion select I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days) for the portion that you rolled over into a traditional IRA. 
  5. Confirm the entire amount was rolled over. You should not be taxed on the rollover.
  6. Repeat with the portion of the distribution that was converted to a Roth IRA. Add the Box 2a taxable amount to this distribution. After entering the information and going through the same few screens, you will get to Did you move the money to a Roth IRA? Select Yes, this money was rolled over to a Roth IRA. 

You will be taxed on the Roth conversion but will not pay the additional penalty for an early withdrawal. On your Form 1040, you should see the entire amount from the 1099-R in box 5a and the taxable amount that went into the Roth IRA in box 5b and ROLLOVER indicated. To preview Form 1040:

  1. Open or continue your return.
  2. Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
  3. With the Tax Tools menu open, you can then view your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu

Level 1
Feb 27, 2022 10:19:50 AM

RaifH,

Thank you.  Your reply was exceedingly prompt and the solution worked as you instructed.  Although the software did not present the question at step #4, it did act as through that was the case and the outcome was the same.  I am very grateful for this fine service from you and Turbotax.