The 2018 version does not ask if an IRA distribution from a 1099-R was rolled over (only asks if it was transferred to charity or HSA), thereby making the distribution fully taxable. This is a problem if the distribution was rolled over to another IRA account.
When you enter your 1099-R in TurboTax, in a subsequent screen you will be asked What Did You Do With The Money From This Payer? If you check that you moved the money into another retirement account, a drop-down will appear, and you'll see a place to indicate that you've rolled over either all or part of the distribution.
on the 1099-R form....
what is the code in Box 7?
is the amount in Box 2a zero or something else?
and are you confident you have copied that correctly into TT?
When you enter your 1099-R in TurboTax, in a subsequent screen you will be asked What Did You Do With The Money From This Payer? If you check that you moved the money into another retirement account, a drop-down will appear, and you'll see a place to indicate that you've rolled over either all or part of the distribution.
Also, if you are over the age of 70 1/2, you are required to take a minimum amount of money, the Required Minimum Distribution (RMD) as a distribution each year. That would be why you are seeing a question about transferring the money to a charity. But you will still see the What Did You Do With The Money? screen later in the interview.
Thank you for your reply. The problem is the "what did you do with the money" question does not appear. An IRA account was closed and moved to another institution. The RMD was taken and the remainder rolled into another IRA at a different institution. I received a 5498 form for the rollover from that institution. The 1099-R indicates a full distribution (boxes 1, 2a, 7, IRA/SEP/Simple). I tried entering the RMD amount as the taxable amount for 2a but that didn't work (taxes are still calculating on the full amount). The only thing that works is entering the RMD amount in boxes 1 and 2a so I will have to go with that, despite not matching the 1099-R.
Thank you for your reply. Yes I am confident I am entering the information correctly. I have tried all combinations of responses and none triggers a question asking what I did with the money (other than charity or HSA). The RMD was taken and the remainder rolled over to a new account. The only entry that does not generate taxes on the full amount is using the RMD amount in boxes 1 and 2a.
DO NOT OVERRIDE WHAT IS ON THE FORM
- you are asking for more trouble!!!!! Let's fix this issue now and avoid real issues much later!
those forms were sent by the trustee to the IRS and if you report it wrong, the TT warentee is invalidated - they will not cover any additional taxes or penalties that you may suffer.
Let me see if I can help you out. Please answer the questions below for EACH 1099 you received.
1) are you under or over 59.5 years old? (I suspect you are over 70.5 since you mentioned an RMD)
2) what code is in Box 7? and is the IRA / SEP box checked?
3) is the amount in Box 2a zero or some other figure (I don't need to know what that dollar figure is)
4) if box 2a is not zero, does it match box 1? (again, I don't need to know the exact dollar figure)
please answer this for each 1099 you have.
Thank you. Yes over 59.5, box 7 code is 7 and the IRA/SEP/Simple box is checked. Boxes 1 and 2a match. I cannot get Turbo Tax to trigger the correct question; I think it's a bug.
are you using the online or desktop version of Turbo Tax? and if desktop, is it premiere, deluxe or basic?
I just tested your answers in Desktop Deluxe and it worked correctly. There should be no need to override and
it is not a bug
!!!!
the fact that Box 7 is a 7 indicates you received the money.
How did you move the money from the 1st trustte to the 2nd trustee. If it was a direct rollover (i.e. you never saw the check), that code in Box 7 should have been a G.
Did you get the rollover check from the 1st trustee and then you sent it to the 2nd trustee (within 60 days) or did the 1st trustee send it directly to the 2nd trustee? and that Form 5498 who sent it to you, the 1st trustee or the 2nd trustee (please look closely!)
Please confirm that the dollar amount on Form 1099 in Box 1 or 2a (since they are the same) reflects the amount that rolled over or does it reflect the amount of the RMD?
trying to help you out here so this doesn't get worse!
Thank you. I appreciate your help. I'm using the online version not the desktop version. Can you test that? The 1099-R reflects the amount of the total distribution and code 7 is correct because I took the money and deposited to the new institution on the same day. The rollover amount is the total minus the RMD. It all nets correctly but the online version does not ask what I did with the money.
Unfortunately I can't use TurboTax due to the inability to report my IRA rollover correctly so I switched to H&R Block. Thank you.
I had a similar issue. RMD plus regular withdrawal plus Roth conversion and QCD. All except the QCD were reported on the same 1099. When I tried to enter exactly as shown on the 1099 I had a TT message that it couldn't handle that and I would need to report on separatae 1099s. So I entered 3 different 1099s and everything worked correctly. Might give that a try.
Thank you. My issue was a RMD and indirect rollover (moved to another account within 60 days) on one 1099R (all code 7 distribution). The 1099R is correct; Turbo Tax asks if the distribution was a full or partial RMD but assumes the difference between the distribution amount and the RMD amount is a distribution. It does not prompt a question about whether or not the difference was rolled over (just if it went to a charity or HSA) so it calculated taxes on the full amount. If I entered the rollover amount as a separate 1099R with a rollover code it works, but I was advised to enter the information exactly as it appears on the 1099R. I never heard back from Turbo Tax (other than the desktop version works) so I used H&R Block with no issues. It handled my rollover correctly.
Isabella G:
Thank you so much for this advice. It worked exactly as you stated for my situation with a RMD. I had a Qualified Distribution amount plus too much was withdrawn for my RMD and I had to rollover that overage back into the original IRA.
Your example and descriptions led me to be able to input everything I needed to complete this challenging situation!!
NLH
The desktop version of Turbo Tax can handle the rollovers; the online version cannot. They should both work the same way; however anyone with rollover situations should ensure he/she uses the desktop version (or another software as I did).
I read your answer to another user and I have a similar problem. I did a Trustee-to-Trustee IRA transfer. The 1099-r from the paying trustee incorrectly reported distribution code 7. When I contacted them (Fidelity Investments) they claimed not to worry (and they won't fix it) because they said IRS will match the CORRECTLY completed Form 5498 from the receiving trustee and deduct it from my taxable income! But TurboTax then won't report my tax correctly. I'm using the 2018 H&B desktop version. It does not have a "what did you do with the money" box that I can find. I see only an option to CORRECT the 1099-R. But if I do that, will I lose the ability to e-file? I have all the evidence to show it was a direct trustee-to-trustee rollover. I actually had two of them from two different IRAs. One from Fidelity and another from a different IRA but both use National Financial Services LLC as their agent for preparing the 1099s and they refuse to fix these
If you never received the funds then Fidelity should not have issued a 1099. One option is to report it as shown on the 1099 but indicate it was rolled over within 60 days. This gets it out of taxable income, which is what you want. A concern here might be if there is another 60 day rollover within a year; if there isn't then you shouldn't have a problem. Don't know if you can attach a statement to the return indicating it was a trustee-to-trustee transfer?
Bottom line for me would be: 1) show the 1099 on the return so it isn't kicked out , and 2) get the money out of taxable income. I would definitely not report the income and rely on the IRS to back it out of taxable income by matching to receiving institution's 5498!
Good luck
This is a tricky one. I believe you can execute unlimited direct IRA rollovers but only one indirect IRA rollover (distribution taken but rolled over within 60 days) per year. If you rolled over two IRAs you can't try to report them as indirect rollovers in order to correct the wrong distribution code (only one would be allowed). In addition, Turbo Tax has a bug that does not ask what you did with the money so you can't use it to report them. I would say your options are to try the correct 1099R box, override the code 7 with a rollover code, file manually or consult an expert. Good luck!
This is a tricky one. I believe you can execute unlimited direct IRA rollovers but only one indirect IRA rollover (distribution taken but rolled over within 60 days) per year. If you rolled over two IRAs you can't try to report them as indirect rollovers in order to correct the wrong distribution code (only one would be allowed). In addition, Turbo Tax has a bug that does not ask what you did with the money so you can't use it to report them. I would say your options are to try the correct 1099R box, override the code 7 with a rollover code, file manually or consult an expert. Good luck!
The better way for me to proceed, since BOTH of the transfers were Trustee-to-Trustee, is to prepare corrected 1099-R forms per the process allowed in TurboTax. I have now done that and TurboTax no longer has a problem correctly computing the tax and there's no error indicated in the forms, so I should be able to e-file. Of course, I also can testify that I contacted the issuer of the incorrect 1099-R forms and they refused to correct them, arguing that the IRS will match up the receiving trustee's Form 5498. It's rather a CYA position on the part of the issuer of the 1099-R forms. They can escape this way because there's no penalty to them other than perhaps time spent with IRS if IRS decides to audit my return and them.
If my return gets audited and IRS requests my evidence, I will be relying on TurboTax Audit Protection, which I always purchase and they will have to deal with the IRS on my behalf. I was hoping to avoid all this but Financial Services LLC won't budge.
I know it wasn't easy to find within TurboTax, but I want to make clear here that all of you folks who have responded should be aware that (within TurboTax Home & Business 2018 at least) if the 1099-R form is incorrect the filer can create their OWN corrected 1099-R. There's a box to check in TurboTax to allow for that. Then, depending upon the correction needed, the filer enters the CORRECT information into the corrected form and provides the explanation in the provided for places that come up within TurboTax. In my case both of these were direct Trustee-to-Trustee transfers, which are NON-REPORTABLE EVENTS. So I had to prepare my 1099-R showing that they were ROLLOVERS and within the explanation pages provided in TurboTax I explain where I obtained the numbers that I entered and the evidence I have that my request for the issuers of the incorrect 1099 Forms to fix them were denied.
Please everyone Note: You CAN fix the incorrect 1099-R within TurboTax. Just follow the page carefully. I'm a bit surprised I'm still getting replies suggesting all kinds of other ways to treat the correction. Don't do that! You won't be protected by TurboTax Audit Defense if you deviate from the procedure they have provided within the TurboTax program.