IRA Rollover in 2023 Paid Back in 2024

[Kevin L]

Hello.  We had took out funds from an IRA in late 2023.  We receive a 1099-R for this.  We fully repaid it in early 2024 (before the 60 day requirement).  My question is - can we avoid the paying tax for this in 2023?  

Thanks a lot for your help,

Kevin 

[DanaB27]

Yes, if returned it within 60 days then this is a rollover. Please follow these steps to enter it in TurboTax:

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)" 
4. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
5. Enter the information from your 1099-R
6. Continue "What did you do with this money from this payer?", select "I moved the money to another retirement account (or returned it to the same account)" then select "I rolled over all of it to another traditional IRA or other retirement account (or returned it to the same account)"

Please be aware that the whole distribution will show as income in TurboTax on the summary screen which shows gross income, not taxable income. To verify that the entry is correct please look at form 1040 line 4b (taxable amount),it should show $0 and state ROLLOVER next to it (assuming you returned the full amount).

[Kevin L]

Wow!  Thanks for the quick reply and all of the detail.  I worked perfectly.  

Kevin