Rollover 401k shows as income?

[HelenaC · Accepted solution]

401(k) Rollovers show as income but are not taxable. Turbotax will show the distribution on Form 1040 Line 16a (for Pensions and Annuities) with the word ROLLOVER next to it, and there will be no tax consequence.

Please see the screenshot below that shows the screen, in TurboTax, where you would show the rollover designation.

In TurboTax, jump directly to the entry screen for Form 1099-R:

1.    In the TurboTax search box, enter 1099-r (with the dashes) and press the Enter key,
Then click on the jump to 1099-R link.

2.    On the Your 1099-R screen, check the Yes button by Did you have any of these types of income in 2015?, then click Continue.

3.    Follow the prompts to either import or enter your RRB-1099-R form and finish the interviews. 

Important: if a Form 1099-R box is blank, leave the box blank in TurboTax! Do not enter a "0" (zero). Be sure to answer the question that you moved the money to another retirement account (this could be the same retirement account).

If you had tax withholding on Form 1099-R box 4, you will get it back as either a refund or when it is applied as withholding for tax owed (liabilities) on your Form 1040.

[TaxMom999]

If rollover amounts are added to income, it effects your tax bracket and therefore how much you should have paid for taxes for that 'inflated income.   If it is 100% rollover, then it is not income.

[TaxMom999]

If the amount deducted from the original 401K was 'income', then the same amount should also be entered as a deduction when it is deposited in the new employers 401K.

[tomolasleolas]

The rollover amount is shown as income in TurboTax and has pushed my husband and mine's combined income over $150,000.  We have a rental property and consequently are disqualified for taking any deductions related to taxes, expenses and insurance, property management etc. because of this inflated income amount.  I need help please.

[tomolasleolas]

My rollover amount was added to my husband and mine's combined income and pushed over the threshold of $150,000.  Now this has disallowed any deductions related to our rental property, (taxes, insurance, expenses, etc.)  I need help.  This is not income - the money just moved from one account to another.  I need help please.

[pmevery]

I'm having the same problem. Rollover amount is being added to my AGI.

[adplus]

There is no option to check if the 401k rollover went into an IRA...only option is a Roth, and now it is being added to my AGI.  Where do I fix this?

[nuclear-ned]

I have the same issue as tomolasleolas, pmevery, and adplus. Turbo Tax is adding my rolled over 401k to my AGI although the 1040 form shows "Rollover".  We need an answer or a update to Turbo Tax.

[macuser_22]

@adplus - If not a Roth, then the only other choice is a Traditional IRA so no need to ask.

@nuclear.ned - A 2018 1040 line 4 with ROLLOVER will only add any line 4b income to the AGI on line 7 - non-taxable rollovers are not added.

Since 2018 tax returns are very different than 2015 tax forms, I am closing this 3 year old question.

[Roberts670]

I mistakenly received two RMD's from my 401K in 2019.  I rolled the second RMD into an existing traditional IRA within 60 days.  How do I enter into Turbo Tax so the second RMD is not included in my AGI?

[DaveF1006]

Please follow the instructions in this link.  Here is a summary on how you report this as a rollover.: 

1. Enter the 1099R exactly how it is on the form. For the rollover RMD, if it doesn't have a code G
2. There will then be a series of followup questions after you enter the 1099R.  One of those questions will ask:
3. What you did with the money.  Here is the option where you would enter that you moved money to another retirement account.

[LDH1015]

So it’s ok that it shows up under total income but not in taxable income, is that right?  Because my total income looks so high, is it preventing me from being able to take other deductions, such a charitable deductions?  All of our charitable deductions influenced our taxes 0 this year. 

[SusanY1]

Yes, it is okay that it shows up under total income.  It is not preventing other deductions or otherwise counting "against" you.  It may be that your charitable deductions are not counting because your higher standard deduction is better this year or for some other reason. 

To check to see if the higher standard deduction is being used, take a look at your tax summary following these steps:

• Login toTurboTax.com.
• Click on Tax Home on the left side of the screen.
• If prompted, click on Continue where I left off or Take me to my return.
• Click on Tax Tools.
• Click on Tools.
• In the box that pops up, click View Tax Summary under Other helpful links.

The standard deductions for 2019 are as follows:

Single filing status/Married Filing Separately: $12,200

Head of Household: $18,350

Married Filing Jointly: $24,400

Additions for over age 65 and blind, per person: $1,300

@LDH1015