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posted Mar 1, 2023 7:06:45 PM

I rolled over a 401k into an IRA to pull it early for a first time home down payment. The return is counting the 1098 for the 401k rollover as income

I rolled over my 401k into an IRA for the first time home buying downpayment. Turbotax is counting my rollover as income as well as the IRA 1098. Is this correct or did I screw up somewhere?

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2 Replies
Expert Alumni
Mar 1, 2023 8:15:10 PM

As long as you did a direct rollover (trustee to trustee), or if distributed to you, you deposited the funds into your IRA within 60 days, the transaction is not taxable.   After you enter(ed) the 1099-R, there is a page that asks "What Did You Do With The Money From [Retirement Plan]"

Be sure you indicate first that you "...moved the money to another retirement account (or returned it to the same retirement account)."  and that you "rolled over all of this money to another IRA or other retirement account (or returned it to the same account)."

Level 15
Mar 2, 2023 5:31:14 AM

TuboTax should be showing the rollover from the 401(k) to the traditional IRA as nontaxable income.  Check to see that the amount is included on Form 1040 line 5a but is excluded from line 5b with the ROLLOVER notation.