Only 1 form 1099-R but 2 5498 forms

[ngocphamtax]

Hi,

I have the situation where:

Only one 1099R, but two separate 5498's were submitted to the IRS.

I rolled over an after tax amount to Roth IRA. This amount includes a smaller pretax amount which is a capital gain from the after tax amount.

The pretax amount is split in 2 portions:

- A portion "X" is rolled over to the Roth IRA with the after tax amount. The amount "X"  is in box 2a of form 1099R.

- A portion "Y" is rolled over to the Rollover IRA which is in the a form 5498.

I have 2 5498 forms:

1. Form 5498 with IRA type "Roth IRA" with the both after tax amount and the pretax portion "X", that are  rolled over to a Roth IRA.

2. Form 5498 with IRA type "IRA" with the pretax amount "Y" rolled over to a Rollover IRA.

On the 1099R form, I have values in box 1, 2a ("X"), 5 and box 7 with G.

- What is a correct way to enter this scenario in Turbo tax ? I have only 1 1099R which I entered its values in 1 1099R entry.

- How can I specify the pretax amount "Y" that is rollover to a Rollover IRA ?

Thanks.

[macuser_22]

The 5498 forms are information only and do not go on a tax return.

TurboTax does not directly support a single 1099-R going to two different destinations.

What you must do is split the 1099-R into two 1099-Rs.

For the amount rolled to the Traditional IRA.

1) In box 1 use the original 1099-R box 1 minus the box 5 amount.

2) Box 2a = 0.

3) Box 5 = blank.

4) Box 7 = G.

5) Answer NO to the two interview questions that ask about a Roth - the default is a Traditional IRA.

For the amount rolled to the Roth IRA.

1) In box 1 enter the original box 5 amount.

2) Box 2a - 0.

3) Box 5 = original box 5 amount.

4) Box 7 = G.

5) Answer NO to the first interview question about a 401(k) Roth and YES to the rollover to a Roth IRA.

That should properly report the 1099-R. The box totals of the two 1099-R should equal the amounts on the original 1099-R.

Nothing about splitting into two 1099-R's go on a tax return - the IRS only gets the dollar amounts on the 1040 form.

[ngocphamtax]

I think:

- the pretax portion that goes to the Roth IRA would be the taxable amount in box 2a.

- the pretax portion that goes to the Rollover IRA would not be taxed.

Why do suggest box 2a in both case = 0 ?

[macuser_22]

A 401(k) should never include any pre-tax money in the check that is deposited in the Roth IRA, that should only be after-tax money.   All pre-tax money would be deposited in the Traditional IRA.   Are you saying that there were two checks and the Roth was not all after-tax money?    401(k) plan administrators are not supposed to mix per and after tax money.

[ngocphamtax]

I contributed all after tax money into the 401k. After a while, the after tax money generated some gains which is pretax money. 

The 401(k) plan administrators allowed me to roll over a small portion of the pre-tax money to Roth IRA and I need to pay tax on that portion. I don't know why  they did that. I saw that small portion is specified in box 2a as taxable amount.

How can I deal with this case in Turbo Tax ?

[macuser_22]

Something does not sound right.   Your payroll deferrals that were reported on your W-2 with a code D in box 12 can ONLY be before tax money.    Any employer contributions to the plan are always before tax money.  Only additional employee contributions were not on a W-2 can be after-tax money.

If part of the money that went into the Traditional IRA was after-tax money then you need to track that as a "basis" in the Traditional IRA.    If any before-tax money went into the Roth IRA then that is a taxable conversion and the 1099-R for the Roth would have the total amount in box 1 and the before tax amount in box 2a.

I overlooked that you said that the 1099-R that you received has a value in 2a so that should reflect the after-tax money rolled into the Roth.

[ngocphamtax]

Yes. I checked in the W-2 with a code D in box 12 , the amount  25,000 is before tax money.

I don't see the after tax contributions amount in my W-2. 

So you are saying the 2a box amount is somehow related to W-2 form ?

[ngocphamtax]

I answer you for my case:

"If part of the money that went into the Traditional IRA was after-tax money then you need to track that as a "basis" in the Traditional IRA.    "

Answer:

I don't have any after tax money went into Traditional IRA. Only the pretax (a small portion of the gain) goes to Rollover IRA. (I think Traditional IRA is same as Rollover IRA.)

"If any before-tax money went into the Roth IRA then that is a taxable conversion and the 1099-R for the Roth would have the total amount in box 1 and the before tax amount in box 2a."

Answer: In my 1099-R for the Roth has:

- box 1 has the total amount = after tax amount + pretax amount went to Rollover IRA + pretax amount went to Roth (in box 2a.)

- box 2a has the pretax amount went to the Roth.

- box 5 : only after tax contribution amount that I contributed went to Roth, excluding the capital gain.

[dmertz]

From your description, it appears that the Form 1099-R correctly reports that you rolled over to the Roth IRA an amount equal to the amount in box 5 plus the amount in box 2a, with the remainder of the gross amount going to the traditional IRA.  Nothing particularly wrong with that, it just means that you have some amount of taxable rollover.  It's doesn't mean that any of the after-tax money ended up going to the traditional IRA.  The box 5 amount becomes basis in nontaxable conversions in your Roth IRAs and the box 2a amount becomes basis in taxable conversions.  In your split Forms 1099-R, the one for you rollover to the Roth IRA will have the sum of boxes 1a and 5 in box 1.  The Form 1099-R for the portion rolled over to the traditional IRA will have the remainder of the original box 1 amount in box 1 and zeros in boxes 2a and 5.

[ngocphamtax]

How I can file the pretax money that went to the Rollover IRA with Turbo tax ?

[macuser_22]

Then as I said, for the money that went to the Roth put the box 2 amount from the 1099-R that you received i to that 1099-R and it will be treated as a conversion and taxed.

[ngocphamtax]

Please confirm the following:

For the amount rolled to the Traditional IRA.

1) In box 1 use the original 1099-R box 1 minus (original of the box 5 amount + original box 2a amount)

2) Box 2a = 0.

3) Box 5 = blank.

4) Box 7 = G.

5) Answer NO to the two interview questions that ask about a Roth - the default is a Traditional IRA.

For the amount rolled to the Roth IRA.

1) In box 1 , enter the original box 5 amount + original box 2a amount.

2) Box 2a - original 2a amount

3) Box 5 = original box 5 amount.

4) Box 7 = G.

5) Answer NO to the first interview question about a 401(k) Roth and YES to the rollover to a Roth IRA.

That should properly report the 1099-R. The box totals of the two 1099-R should equal the amounts on the original 1099-R.

[dmertz]

Sounds correct to me.

[ngocphamtax]

Thank you.

[macuser_22]

I agree.