No. You must use the code on the 1099-R. A qualified rollover is not taxable but you must tell TurboTax that is was a rollover.
Enter a 1099-R here:
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 under My Account) 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.
If this was a rollover or conversion, answer the question that you moved the money to another retirement account (can be the same account). The screen will open up with choices of where it was moved.
[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.]
It will show as income on the summary screen which shows gross income, not taxable income.
The income will be reported on line 4a on the 1040 form with the word “ROLLOVER” next to it if it was a rollover.
The taxable amount will go on line 4b. In the case of a rollover, that amount will be zero.
so, on my 1099R, the code on the back of the form is G which is not taxable. I got that part. What I don't understand is why the money is showing up as income when I am done. It increases my gross income which then places me in a higher tax bracket even though my 401k was rolled over into my annunity without taking any money out.
All distributions are reportable "income" whether taxable or not. "Income" just means that it something that must be present on Form 1040, in this case included on line 4a but not in the taxable amount on line 4b, with the ROLLOVER notation next to the line. This nontaxable income has no other effect on your tax return.
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