Rollover of after tax money from 401k to ira and Roth ira

[krissaun]

I did a rollover of after-tax money from a 401K. The After tax contributions got rolled over to a Roth IRA. The earnings got rolled over to a traditional IRA. I received one 1099R from Fidelity for both rollovers. I was told that neither of these Rollovers was a taxable event. Box 2a on the form (taxable amount) is 0. When I input the form into turbo tax, I’m taxed on this transaction. What am I doing wrong?

[macuser_22 · Accepted solution]

TurboTax does not support a single 1099-R going to two different destinations.    The 1099-R needs to be broken into two.

Assuming that the box 7 code is a G and the after tax money is in box 5, here is the procedure:

(If not, post back with the box 7 code and the box 2a and 5 amounts.)

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.