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I moved money from a 401K to an IRA, do I need to report that?

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I moved money from a 401K to an IRA, do I need to report that?

Yes, you must report the rollover on your tax return. The financial institution will send you a Form 1099-R which you will use to report the transaction. If this was a direct rollover from your 401(k) to the IRA, box 7 of this form will have code G, Direct rollover and direct payment.

If you do not receive the Form 1099-R by February 15, 2017, please see IRS Tax Topic 154 - Form W-2 and Form 1099-R (What to do if Incorrect or Not Received).

A note about indirect rollovers

Retirement plan distributions are reported on Form 1099-R. If you had a direct rollover, the funds moved directly from one financial institution to another, so you never saw the money. As mentioned above, direct rollovers are indicated with code G (or H) in Box 7 of the Form 1099-R. There is no special box 7 code for an indirect rollover (i.e., the code will indicate something else, such as “1” for an early distribution). Instead, enter the 1099-R that reports the distribution, then continue through the tax interview. TurboTax will ask what you did with the money, and you can indicate that you rolled it over (click the first screenshot below to enlarge it for reference). Note that if you only rolled over part of the funds, you'll be prompted to enter the rollover amount (click the second screenshot below for reference).

To enter your rollover:

  • Open (continue) your return in TurboTax.(If your return isn't open, you'll need to sign in, click Take me to my return, then click Pick up where I left off.)
  • Click My Account (top right of your screen).
  • Click Tools.
  • Click Topic Search.
  • In the search bar, type 1099-r.
  • In the results box, highlight 1099-r and click Go.
  • You'll  land on the Your 1099-R page, which asks Did you have any of these types of income in 2016? Select Yes, then click Continue.
  • Follow the prompts to either import or manually enter your 1099-R form and finish the interview, paying careful attention to the rollover questions if you made an indirect rollover.

For more information, please see the FAQ below. 

What Is the Difference Between a Direct and an Indirect Rollover?

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