I did a 401k rollover to traditional IRA. Turbotax is treating this as income. This can't be correct!

[yulud]

More details: I did a 401k rollover to traditional IRA. Turbotax is treating this as income, even though 1099-R says this is a rollover (code G in box 7) and not taxable (2a is 0). In review, I can see the way it's calculating tax, this amount is included in the calculation as well. How do i fix this?

[MindyB]

After you enter the 1099-R information, continue through the interview questions and indicate that you rolled over the amount to an IRA.  This will remove the income that is being computed.

[yulud]

@MindyB Thanks Mindy.

I remember seeing this when I first uploaded 1099-R, and I remember I selected the first option. But now when I go back, I don't see the question anymore. The only questions I get is whether I converted it to Roth 401k or Roth IRA. I said no to both. Still, it's treated as income. Should I go back and delete the 1099-R and upload again?

[yulud]

@MindyB I just deleted the 1099-R and uploaded it again. In the subsequent interview question, I didn't get the question of 'whether I rolled over to a traditional IRA'. All I got were the two Roth 401k and Roth IRA questions. How do I get to the rollover to traditional IRA question?

[DanaB27]

No, you don't need to delete the Form 1099-R. You see the correct follow-up questions for code G.

1. On the "Did you move this money from a 401(k) to a Roth 401(k)?" screen answer "No"
2. On the "Did you move the money to a Roth IRA?" screen answer "No"

Answering no to both questions let's TurboTax know you rolled the funds over to another pre-tax account like the Traditional IRA.

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 5b (taxable amount), it should show $0 and state ROLLOVER next to it.

To preview Form 1040:

1. Click on "Tax Tools" in the left menu
2. Click "Tools"
3. Click "View Tax Summary" in the Tool Center window
4. Click on "Preview my 1040" on the left

[yulud]

Thanks @DanaB27 

When I click on Tax Tools, then Tools, I see the following window. When I click on view tax summary, I don't see a link on the left to preview 1040. I only see a summary amounts just the same as preview. Should I have clicked somewhere else?

[DanaB27 · Accepted solution]

Selecting "View Tax Summary" is correct.

After selecting "View Tax Summary" you should see on the left bar "Preview my 1040" under 2024 Taxes.

[yulud]

Thanks @DanaB27 

I am able to preview 1040 and I can see that the 401k rollover amount was not included in tax calculation. Thanks very much for your help!