I did a direct 401k rollover to a ira annunity turbo tax wants to tax me for all of it with penalty except 6500. it was all rollover. what gives

[DanaB]

What was the code in box 7? And it was a rollover to a Traditional IRA?

[macuser_22 · Accepted solution]

If you entered this in the IRA contribution section then REMOVE it.  A rollover is NOT an IRA contribution.

Enter a 1099-R here:

Federal Taxes,
Wages & Income
(I'll choose what I work on - if that screen comes up)
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR  Use the "Tools" menu (if online version left side) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

Answer NO to the two Roth questions and the default is a Traditional IRA rollover.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

The box 1 amount will go on the 1040 line 4a with ROLLOVER next to it.

[DanaB]

Please ensure you followed these directions on how to enter the 1099R for the rollover from 401k to traditional IRA:

1. Login to your TurboTax Account 
2. Click "Take Me To My Return"
3. Click "Federal" from the left side of your screen
4. Scroll down and click "Start or Edit/Add" next to "IRA, 401(k), Pension Plan Withdrawals (1099-R)" 
5. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
6. Click "I'll Type it Myself"
7. Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc." and click "Continue"
8. Enter your 1099-R 
9. Answer questions until "Rollover of 401(k) to Roth 401(k)" and answer "No"
10. On the "Was this Money Rolled Over to a Roth IRA?" screen answer "No"

[gigipapa21]

I saw the same thing and that is what I figured. My question would be, because I just retired in October and did the rollover, when I enter it in the beginning of the return, it almost doubled my income amount. Is this correct? And, am I correct in assuming that even though it shows that, I am not taxed on that as it was a rollover.  The larger amount takes us out of the stimulus bracket...