IRA Basis 60 day rollover into following year

[b0075001]

I am doing a 60 day rollover into my IRA, which was opened about 20 years ago. I am 63. The distribution was done in November, 2022 from an old 401(k), and made out to me, less 20% taxes withheld. The proceeds will be deposited in January, 2023 within 60 days PLUS the taxes that were withheld. The 2022 end of year balance in my IRA will not include the IRA deposit. Since the 2022 form 8606 will not include the fully deposited after tax funds in my IRA, to be made in January, 2023, how will the non taxable portion of my deposit get recorded in the 8606?

[dmertz]

It's not clear why Form 8606 would be included in your 2022 tax return at all.

This rollover from the 401(k) that will be deposited in early 2023 should have no effect on your 2022 Form 8606.  If this rollover from the 401(k) includes after-tax basis, only the pre-tax portion should be rolled over to the traditional IRA and the after-tax portion should be rolled over to a Roth IRA.

[b0075001]

Thanks for your response. I don't think I was clear, though. The entire indirect rollover from the 401(k) is a taxable distribution, unless I do the 60 day rollover, which is how I wanted to handle it. Even though 20% was withheld for taxes, I need to fully put the distribution plus the taxes that were already withheld back into my IRA, otherwise the 20% withheld would need to be reported as taxable income. My point was, since the taxes were withheld, that portion that I am putting back in the IRA was already taxed. Wouldn't this need to identified in the 8606 at some point? 

[NCperson]

@b0075001 - the portion you are  putting back is not 'fully taxed'.  it was the tax itself, presuming you didn't roll over the original amount.

let say there is $10,000 to be rolled over.  it is all pre-tax money. 

the trustee sends you a check for $8,000 and sends $2,000 to the IRS

you have NOT reported the $10,000 on your tax return, so it is all 'pre-tax'.

you send $10,000 to the new trustee within 60 days - still haven't reported it on a tax return, so it all remains "pre-tax"

your 1099-R shows $2,000 withholding, which in effect increases your refund on your tax return. it was NOT taxed nor reported as income leading up to Line 11 (AGI) of your 1040 tax return. 

nothing was "fully taxed".  😀

[VolvoGirl]

My point was, since the taxes were withheld, that portion that I am putting back in the IRA was already taxed.

No, that portion was NOT already taxed.  You only had withholding taken out.  That is not the actual tax.   You will get credit for the 20% withholding on your tax return and can get it back if all your withholding is more than  the tax due on all your income.  

[b0075001 · Accepted solution]

ok, I see now. Thanks to all who replied and cleared this up!