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edpillard
New Member

I transferred funds from a 401K with pre tax and after tax money to an IRA and Roth IRA for the after tax. TT is showing the Roth transfer taxable. Is this correct?

 
5 Replies
MichaelL1
Level 15

I transferred funds from a 401K with pre tax and after tax money to an IRA and Roth IRA for the after tax. TT is showing the Roth transfer taxable. Is this correct?

That is correct if you have two 1099R's from the 401K, if you have only one 1099R you will have to do what is listed below. 

-------------------------------------

You will actually have to split this out and show it as two separate 1099R's one for the Roth amount only and one for the Traditional IRA amount.

Form 1099-R -- Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.: A single Form 1099-R rolled into multiple types of retirement plans (IRA, Roth IRA, other qualified retirement plan, etc.) is not supported. In this situation, you must determine the amount rolled into each type of plan. Then treat each part of the rollover as a separate distribution and enter on multiple 1099-R worksheets. "

Form 1099-R -- Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.: A single Form 1099-R rolled into multiple types of retirement plans (IRA, Roth IRA, other qualified retirement plan, etc.) is not supported. In this situation you must determine the amount rolled into each type of plan. Then treat each part of the rollover as a separate distribution and enter on multiple 1099-R worksheets. "

Source #27 https://digitalasset.intuit.com/DOCUMENT/A5pxS2bpm/Unsupported-Calcs-GEN12868.pdf

rk777
Level 2

I transferred funds from a 401K with pre tax and after tax money to an IRA and Roth IRA for the after tax. TT is showing the Roth transfer taxable. Is this correct?

Does this also apply if you receive a lump- sum pension distribution, and a portion of it is after- tax employee contributions, reported all in one 1099-R? The pretax goes to Traditional IRA, the after tax went to a Roth IRA? Seems like a significant oversight in the instructions (or was the 1099-R prepared incorrectly by the financial inst?). Ignoring the after-tax portion correctly characterized everything as non- taxable - but does that create a problem with properly tracking the after tax funds into the Roth IRA, for the future? Thx.

macuser_22
Level 15

I transferred funds from a 401K with pre tax and after tax money to an IRA and Roth IRA for the after tax. TT is showing the Roth transfer taxable. Is this correct?

 

 


@rk777 wrote:

Does this also apply if you receive a lump- sum pension distribution, and a portion of it is after- tax employee contributions, reported all in one 1099-R? The pretax goes to Traditional IRA, the after tax went to a Roth IRA? Seems like a significant oversight in the instructions (or was the 1099-R prepared incorrectly by the financial inst?). Ignoring the after-tax portion correctly characterized everything as non- taxable - but does that create a problem with properly tracking the after tax funds into the Roth IRA, for the future? Thx.



Yes.

 

  TurboTax does not directly support a single 1099-R going to two different destinations.

 

If box 7 is code G and the after-tax money is in box 5 then do it this way.


What you must do is split the 1099-R into two 1099-Rs.

For the amount rolled to the Traditional IRA.

1) In box 1 use the original 1099-R box 1 minus the box 5 amount.

2) Box 2a = 0.

3) Box 5 = blank.

4) Box 7 = G.

5) Answer NO to the two interview questions that ask about a Roth - the default is a Traditional IRA.

For the amount rolled to the Roth IRA.

1) In box 1 enter the original box 5 amount.

2) Box 2a - 0.

3) Box 5 = original box 5 amount.

4) Box 7 = G.

5) Answer NO to the first interview question about a 401(k) Roth and YES to the rollover to a Roth IRA.

That should properly report the 1099-R. The box totals of the two 1099-R should equal the amounts on the original 1099-R.

Nothing about splitting into two 1099-R's go on a tax return - the IRS only gets the dollar amounts on the 1040 form.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
rk777
Level 2

I transferred funds from a 401K with pre tax and after tax money to an IRA and Roth IRA for the after tax. TT is showing the Roth transfer taxable. Is this correct?

Thx for the guidance!

But, there is some additional un-clarity around questions for Michigan, 'where is this distribution from' -

Can I answer 'None of the above'? Pension/IRA distributions received before retirement age, but I did take a retirement at age 51 here. Thx!

 

Also, does Turbotax take user questions into account and fix the incompleteness in their software (at least to point out some cases not 'supported', in the 'learn more' notes, not from searching a 'community')

macuser_22
Level 15

I transferred funds from a 401K with pre tax and after tax money to an IRA and Roth IRA for the after tax. TT is showing the Roth transfer taxable. Is this correct?


@rk777 wrote:

Thx for the guidance!

But, there is some additional un-clarity around questions for Michigan, 'where is this distribution from' -

Can I answer 'None of the above'? Pension/IRA distributions received before retirement age, but I did take a retirement at age 51 here. Thx!

 

Also, does Turbotax take user questions into account and fix the incompleteness in their software (at least to point out some cases not 'supported', in the 'learn more' notes, not from searching a 'community')


Sorry but I have idea what Michigan asks - I do not have that state software.

 

There is an entire FAQ that explains what is unsupported.

 

https://ttlc.intuit.com/community/choosing-a-product/help/are-there-any-personal-individual-tax-situ...

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

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