How can I enter a non-taxable rollover on Turbotax?

[Anonymous]

Vanguard accidentally took out my RMD from my IRA twice. The 1099R shows both RMD's summed together as one distribution with federal and state taxes for NJ taken out.Upon learning of their error they redeposited one of the RMD's back into the IRA within the 60 day period permitted. They didn't send me a corrected 1099R or any other documentation. How can I enter this on Turbotax?

[KatherineC]

To report your IRA distribution and partial return of said distribution, you will need to:

• Log into your TurboTax return
• Click on Federal Taxes
• Click on Wages and Income
• Scroll to Retirement Plans and Social Security
• Click on the button beside IRA, 401(k), Pension Plan Withdrawals (1099-R) (See the screenshot below)
• You will be asked if you have any of the types of retirement income listed – you will need to answer yes

Go on through the next couple of screens entering your information.  When you get to “Enter your 1099-R”, you will enter all the information exactly as it is reported on your Form 1099-R. 

• When you get to the screen titled "What Did You Do With The Money from (Name of Broker)?" Indicate that you moved the money to another retirement account (or returned it to the same retirement account).
• Then indicated you did a combination of rolling over, converting or cashing out the money.
• And how much you rolled over to another (or back to the same) retirement account. 
  
• (See the second screenshot below)

Answer a couple more questions and you will be done!

[macuser_22]

When you get the RMD question say that part of the distribution was a RMD and enter the actual amount of the RMD, otherwise TurboTax will not allow a rollover if you say it as all a RMD.

[Marty4560]

I was with you, but don't see those screens.  Mine was an IRA payout mistake by the BANK and Turbo Tax SAYS it will help since I clicked the radio button for:  I rolled it all over to the same type of IRA and with in the 60 days.   IT IS NOT THERE ANYWHERE it just says I owe - even though I really don't.  ANYONE??  Help would be greatly appreciated.

[Critter]

When they transferred the forum to a new site the attached screenshots were lost ... the instructions are correct so follow them ... I suggest you delete the 1099-R and start the process again ...

Go on through the next couple of screens entering your information.  When you get to “Enter your 1099-R”, you will enter all the information exactly as it is reported on your Form 1099-R. 

• When you get to the screen titled "What Did You Do With The Money from (Name of Broker)?" Indicate that you moved the money to another retirement account (or returned it to the same retirement account).
• Then indicated you did a combination of rolling over, converting or cashing out the money.
• And how much you rolled over to another (or back to the same) retirement account. 

[Marty4560]

Thank you, Critter!  I tried deleting and re-adding it back. 

Did I inherit it?  No

What did I do with the money from the bank?

I indicate I moved it to another retirement account and that I rolled over all of the money.   

Did I put it in a HSA ?  No

Then it shows it as a Gross payout.

Next it asks:

2016 Disaster Distribution?  No

2016 Hurricane repay?  No

2017 Disaster Distribution?  No

2017 Hurricane repay?  No

and then it take me to the "Income" page showing that it is income.

Any thoughts? 

[VolvoGirl]

Oh, If you are looking at a summary screen or review screen those show the full amount as income and lump a lot of stuff together. You need to check the actual 1040 and make sure it’s right.   For 1099R check 1040 line 4b or 4d for any taxable amount.  If it was a rollover it should say ROLLOVER by it and 0 taxable. 

[Marty4560]

YEAH!! Turbo gave a great answer:

1. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account (or returned it into the same account) ”
2. Then choose “I rolled over all of this money.”

Please be aware that the whole distribution will show as income on the summary screen in TurboTax which shows gross income, not taxable income. To verify that the entry is correct please look at form 1040 line 4b (taxable amount), this should be $0 and have ROLLOVER next to it.

To preview Form 1040:

1. On the left side of your screen, select Tax Tools, then Tools.
2. Under Tool Center, select View Tax Summary.
3. On the left side of your screen, select Preview my 1040.

[VolvoGirl]

Just thought of something else.  You said that it showed you owe on it?  What code is in box 7?  Did they take any tax withholding out of it?  If they did then when you put it back in you had to replace the withholding from your own money or the withholding became a distribution and taxable.

[fanfare]

If Vanguard corrected the error and put the whole amount back in including the tax, then your 1099-R must be corrected (unless it is already correct).

[Marty4560]

thank you everyone!  VolvoGirl gave the best answer: you need to go and look at what the tax form is going to say on line 7.  This was a bank CD IRA (yes - it is old), not an investment company.  It was such a mess with the bank and I have all the forms, and the new CD IRA, in the event the IRS comes a knocking.  I was surprised that I was not required to complete any other proof other than say I rolled the total amount over in to the same time of IRA. 

[Critter]

" I was surprised that I was not required to complete any other proof other than say I rolled the total amount over in to the same time of IRA. "

That is because the IRS gets a copy of the form 5498 (that you also get) that shows the rollover ... that is the confirmation of what you entered on the tax return.  It is just that simple ... nothing more needed to be done on your return.   Keeping the records of all things that happen inside your IRA until it is completely liquidated is wise. 

[Marty4560]

Thanks, Critter.  Here is another twist, the rollover, while in 60 days, was in 2020.  I guess I have the paperwork in case I need to throw myself on the mercy of the IRS.  Ha!  

Yes, I am hanging on to this paperwork!!

[Critter]

Doesn't matter if the roll spanned 2 tax years as long as it is done timely ... again the 2020 form 5498 that is issued next year by May 2021 will confirm your 2019 tax return entries. 

[rgaylortx]

I have a 1099R that received a distribution in 2020.

Step by Step says that it is not taxable.

1040 line 4a is blank, Line 4b shows full distribution amount

Rollover shows before Line 4b amount

Line 4b amount is carried to line 9 on 1040

Looks like Turbotax calc error