I transferred money from my "inherited" Tsp, was my wife. I used the option to transfer if to my roth IRA. My 1099-r says I owe no taxes. when do I need to pay taxes?

[dmertz]

What are the codes in box 7 of the Form 1099-R?
Is the IRA/SEP/SIMPLE box marked?
Is the amount in box 2a zero?
Is box 2b taxable amount not determined marked?

[damackall]

box 7 is 4G, box not marked, No 2a is same amount as the distribution, 2b is not marked.  Thanks

[damackall]

when I put in the G code for box 7, turbotax clears the taxable amount, and I have a refund.  Should I leave the "G" code as no entry?

[dmertz]

No, you cannot change the codes or the amount in box 2a.  Code G by itself would be for a distribution from your own qualified retirement plan.  For this distribution from your deceased wife's TSP account, the codes must be G *and* 4.  Because you rolled it over to a Roth IRA, the entire amount rolled over is taxable to you.  Had you rolled it to a traditional IRA instead, taxes would have continued to be deferred (and box 2a would have been zero).

If you don't like the tax result, you can recharacterize some or all of this taxable rollover to be a rollover to a traditional IRA instead, thereby continuing to defer taxes and allowing you to convert to Roth in smaller amounts over multiple years.  If you want to recharacterize any of this taxable rollover, you must contact the Roth IRA custodian to initiate that.

[damackall]

I guess I'm not making myself clear.  When the G code is entered into turbo tax, it changes  box 2a to zero making it so that I owe no tax!  Only way to get it to leave 2a at the amount on the 1099-r is to trick turbo tax some way.

[dmertz]

I know of no circumstances where TurboTax will actually change the amount shown in box 2a on it's own for a code 4G Form 1099-R.  However, in the follow-up make sure that you indicate that you did not roll the money over to a Roth 401(k) or Roth 403(b) but that you *did* roll the money over to a Roth IRA.  Until you indicate that the money was rolled over to a Roth IRA, it seems that TurboTax will ignore the amount in box 2a (but not zero it).

Also make sure that you have not inadvertently marked the IRA/SEP/SIMPLE box on TurboTax's 1099-R form.

If these don't result in the box 2a amount being reported as the taxable amount, try deleting and reentering the Form 1099-R.

[damackall]

Deleting and reentering worked!  Thanks for your unfailing support!!!

[dmertz · Accepted solution]

Box 2a equaling box 1 says that you own ordinary income taxes on the entire amount.  Perhaps you are looking at box 4 which shows no taxes withheld; box 4 says nothing about the taxable amount of this distribution.

Presumably this rollover occurred in 2016 and you received a 2016 Form 1099-R.  A 2016 Form 1099-R is reportable and taxable on your 2016 tax return.  Enter the Form 1099-R under Wages & Income-> Retirement Plans and Social Security -> IRA, 401(k), Pension Plan Withdrawals (1099-R), then answer the follow-up questions to indicate that you rolled the entire distribution over to a Roth IRA.  TurboTax will include the entire amount of the distribution on your Form 1040 line 16b or Form 1040A line 12b.  The word ROLLOVER will appear next to the line.