IRA rollover

Forum|Forum|3 years ago
January 25, 2023
1 reply
7 views

I am trying to reduce my retirement income for 2022 by $745. I can't contribute to an IRA because I am not working and I was told that was a requirement to make contributions to affect last years taxes. I read that the IRS allows rollover or put money distributed back into an IRA within 60 days of it being dispersed.

1. Can I do this?

2. If I do this will it lower my AGI for 2022?

3. Do I return the entire month distribution? Gross or net? or can it be a partial return?

My state has a cap of $100,000 where you don't pay income tax. Over that all pension, SS and annuity income is taxable.

Best answer by SantinoD

Yes, you can rollover money distributed back into another Retirement account or the same account it was withdrawn from. The amount put back will not be considered taxable as long as you follow the 60-day rule.

60-day rule- A taxpayer has until the 60th day following a distribution to make a rollover contribution. Distributions that are not rolled over in 60 days are taxable in the year distributed, even if the 60-day period expires in the following year. Contributions made after the 60-day period are treated as regular contributions.

As long as you satisfy the 60-day rule, this will lower your AGI for 2022. You can return any amount you choose, whether full, partial or more. Since your cap is $100,000 of AGI, I recommend returning the amount that will get you under that cap.

Here are the steps to enter a rollover into TurboTax:

Search for 1099-R and select the Jump to link in the search results
Continue through the screens to import or enter your 1099-R form
When asked Tell us if you moved the money through a rollover or conversion select I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days) and select Continue
On the next screen, Did you roll over all of this (Box 1) to another retirement account? answer Yes, I rolled over to an IRA or other retirement account (or returned it to the same account) and select Continue

SantinoDAnswer

Level 6

Yes, you can rollover money distributed back into another Retirement account or the same account it was withdrawn from. The amount put back will not be considered taxable as long as you follow the 60-day rule.

60-day rule- A taxpayer has until the 60th day following a distribution to make a rollover contribution. Distributions that are not rolled over in 60 days are taxable in the year distributed, even if the 60-day period expires in the following year. Contributions made after the 60-day period are treated as regular contributions.

As long as you satisfy the 60-day rule, this will lower your AGI for 2022. You can return any amount you choose, whether full, partial or more. Since your cap is $100,000 of AGI, I recommend returning the amount that will get you under that cap.

Here are the steps to enter a rollover into TurboTax:

Search for 1099-R and select the Jump to link in the search results
Continue through the screens to import or enter your 1099-R form
When asked Tell us if you moved the money through a rollover or conversion select I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days) and select Continue
On the next screen, Did you roll over all of this (Box 1) to another retirement account? answer Yes, I rolled over to an IRA or other retirement account (or returned it to the same account) and select Continue

J

jkmpostAuthor

Level 2

Thank you SantinoD. I have checked on returning the money to the account it came from but the TSP does not allow for that so it would have to be a new IRA account.