Roth Indirect Rollover Reporting in TurboTax

Forum|Forum|4 years ago
March 4, 2022
1 reply
0 views

Hi,

I made a $6,000 withdrawal from my Roth IRA in 2021 and returned it within 60 days. Vanguard told me this is considered an “Indirect Rollover Contribution” and it will be reported on Form 5498 in Box 2 - "Rollover Contributions".

Vanguard’s 1099-R also reported this $6,000 as a distribution in Box 1 – Gross Distribution, and I have reflected this appropriately on Form 1040 – Lines 4a and 4b.

My question is where can I enter the Form 5498 – Box 2 amount in the TurboTax software, so that my tax return is consistent with the forms the IRS will receive?

I tried many things, but nothing seems to work.

Thanks,

Steve

fanfare

Level 15

you can't enter Form 5498 into TurboTax.

any history or other status you enter has to be via the 1099-R followup questions.

Stevie from NJAuthor

Level 2

Thanks for your response.

I think you missed the point of my question. I realize Form 5498 doesn't get entered in TurboTax. My question is where can I enter the Form 5498 – Box 2 amount in the TurboTax software, so that my tax return is consistent with the forms the IRS will receive?

Or think about it another way and forget about the 5498 for the moment. Where does my $6,000 Roth Indirect Rollover Contribution get entered in TurboTax?

I see nothing in the Form 1099-R in TurboTax that could be used for this purpose. That is why I am asking for your help. The interview questions are useless. When I answer them, TurboTax wants to count the rollover as a contribution and then it tells me I contributed too much to my IRAs. That is incorrect information and causes all kinds of issues in TurboTax

I am hoping someone can read my question carefully and possibly provide a thoughtful and complete answer.

Thanks,

Steve

Stevie from NJAuthor

Level 2

I would expect this Form 1099-R to have code J, T or Q and no other codes. After you enter the details of the Form 1099-R, TurboTax will ask what you did with the money. Answer that you moved the money to another retirement account (or back to the same account), then indicate that you rolled over the entire amount. TurboTax will include the entire amount on Form 1040 line 4a, will exclude it from the amount on line 4b and will include the word ROLLOVER next to the line.

Thanks for your response. It works by using the Form 1099-R. But then, it informs me that I have to enter the info on two separate 1099s to make TurboTax treat it correctly.

Very vague on the part of the TurboTax software here. Not at all obvious that the "reversal of a withdrawal" (aka "rollover contribution") is handled in TurboTax on an income form (i.e., 1099-R). The interview questions were not precise. Then, the splitting up of one Vanguard Form 1099-R ito two TurboTax 1099s to make TurboTax work properly is unintuitive and a nuisance.

The whole thing is very frustrating, but at least I have a way forward. Thank you for that response.

Steve

FYI - The Box 7 code is T - Roth IRA distribution, exception applies.