Tax Year Prior to 2020: 1099-R and Form 5498

[macuser_22]

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@smokyriver wrote:

The permitted Roth contribution for 2019 is 7000 if you are over 65; I am over 65; my schedule C income was over $10,000 with over $500 in W2 income, so my total earned income was way higher than $7,000. Therefore on April 2, I contributed $7,000 to my Roth for 2019; but when I put $7,000 into field for Roth Contributions in 2019 TTax it calculated that $3,500 was "disallowed" and added tax on this.  Why is $3,500 disallowed under this circumstance?

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It is your net self-employed income minus the deductible part of the SE tax.  Usually Schedule 1 line 3 minus line 14 plus W-2 box 1 minus W-2 box 11.   Your total MAGI must also be under the limit.   You also cannot file a Married Filing Separate tax return or the MAGI limit is $10,000 if you lived with your spouse.

The most you can contribute to all of your traditional and Roth IRAs is the smaller of:

For 2018, $5,500, or $6,500 if you’re age 50 or older by the end of the year; or
your taxable compensation for the year.
For 2019, $6,000, or $7,000 if you’re age 50 or older by the end of the year; or
your taxable compensation for the year.

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).

See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2018_publink1000230355

See this IRS article for Roth contribution limits:

https://www.irs.gov/retirement-plans/roth-iras

[yabbadu2019]

I withdrew $5k in January 2019 from my Traditional IRA. I returned the entire amount in February 2019 back into the same account . Then in May 2019 I withdrew $6k less Fed. . This money was spent. 

My 1099R now reads $11K withdrawn as taxable and $1200 FT withheld. My broker calls it a rollover and claims a form #5498 may be issued.

For right now I am befuddled as to how and where to deduct the $5k repaid. It looks as if there is a penalty involved  

[BillM223]

When you enter the 1099-R, there are several screens that follow. On the screen with the heading "What did you do with the money from [plan name]?", check the line with "[your name] moved the money to another retirement account (or returned it to the same retirement account)". No, this is not obvious.

Checking the top will expose three new lines. Check the box "[your name] did a combination of rolling over, converting, or cashing out the money".

This will expose two new boxes. in the top box ("Amount rolled over to another (or back to the same) retirement account"), enter the amount of the distribution that you put back in the IRA. This part will appear on line 4a but not 4b on the 1040 because it will not be taxable.

The rest of the distribution will appear in line 4b as taxable.

[Edited 4/13/2020 2:39 pm - corrected typo]

[yabbadu2019]

Could someone please respond to my question?

[DoninGA]

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@yabbadu2019 wrote:

Could someone please respond to my question?

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Your question was answered by @BillM223  in the post directly above your message.

[mae87]

I thought we entered it last year.  Is this a new change??

[DoninGA]

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@mae87 wrote:

I thought we entered it last year.  Is this a new change??

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No, this is not a change.  The IRS Form 5498 is an informational form only and is not entered on tax return.

[macuser_22]

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@mae87 wrote:

I thought we entered it last year.  Is this a new change??

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You thought you entered what last year?

(This thread has wandered to several different topics.)

[ngocphamtax]

Hi,

I have the situation where:

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

- 1 5498 with IRA type : IRA (pretax amount rolled over to a Rollover IRA)

- 1 5498 with IRA type: Roth IRA (the amount rolled over to a Roth IRA)

On the 1099R form, I have values in box 1, 2a (a small pretax amount rollover Roth IRA), 5 and box 7 with G.

How can I specify the pretax amount that is rollover to a Rollover IRA ? I have only 1 1099R.

Thanks.

[macuser_22]

There is a special way to enter that but please ask it in a new question of your own - this thread it already too long and is getting to confusing with different questions.

[ngocphamtax]

ok. I will ask it again in a new thread.

[rtmtmac]

I read your answer and followed your instructions. However, this treatment has an unintended consequence; it raises the amount of your taxable social security benefits. If I remove the 1099 data and opposed to the way you suggested, it reduces my taxable social security income by $ 40,000 and reduces my tax liability.  Any suggestions?

[macuser_22]

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@rtmtmac wrote:

I read your answer and followed your instructions. However, this treatment has an unintended consequence; it raises the amount of your taxable social security benefits. If I remove the 1099 data and opposed to the way you suggested, it reduces my taxable social security income by $ 40,000 and reduces my tax liability.  Any suggestions?

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@rtmtmac Several different people have asked different questions in this tre3ad and have received dofferent an swers.

We do not know what question or answer you are referring to. 

It would be much better of you would just post a new question in a new thread with your details.

https://ttlc.intuit.com/community/taxes/discussion/02/202

Use the "Ask a Question" button.

[aridenour99]

The allocation of my IRA 1099-R Distribution was mixed; part in actual withdrawal (cash), part transferred into a Roth IRA, part Rolled back into the IRA under the 2020 no-RMD wavier.

I received a 5498 indicating the amount Restored (rollover) back to my IRA.

I have tried all options in TurboTax Premier to adjust for the 5498 Restored (rollover) amount but nothing works. TurboTax asks the correct questions but doesn't adjust the 1099-R Distribution amount by the 5498 Returned amount.

I certainly don't want to Pay Taxes on Funds not received or have to scrap TurboTax & use a pencil.

Appreciate any Help on "How to" get TurboTax to handle the 5498.

Thanks,

Jim

[DaveF1006]

After reviewing comments from @macuser_22, I have revised my response.

Yes, under COVID rules, you were not required to take an RMD in 2020. Here is the correct way to report so that everything is reported correctly. 

1.  First of all you will need to split the 1099-R into two entries in your return. For sake of illustration, I am going create an example where $30,000 was the gross distribution. Now I want you to change the original 1099-R to a $20,000 distribution and all other information on the form is the same, including taxes that were withheld. We will create another 1099-R for the remaining $10,000 later.
2. In this 1099-R we will assume that you took $10,000 cash and rolled $10,000 into a traditional IRA.  
3. After you change the amount in the original 1099-R, scroll through the screen until it asks How much of the $20,000.00 was a RMD? in this instance, indicate that none was an RMD or else the entire amount will be taxable. Since an RMD, was not required because of COVID, the IRS needs not know the original intent of the distribution.
4. Next it asks, Tell us if you moved the money through a rollover or conversion. Here will will indicate you
   rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days)
5. The next screen asks how much was rolled over. Here we will say $10,000.
6. Now you will navigate through the screens until you reach a screen that says Tell Us More About This Retirement Plan Distribution. Here you will say, you were not required to take a required minimum distribution.
7. Now i check my 1040 preview and the amount was correctly allocated between the distribution that was taken and the rollover. now my taxable income is $10,000 for the money I kept. Now let's address the remaining $10,000 in the second 1099-R.
8. Now you will want to add a second 1099R for the remaining $10,000. Again, you will record the same information from your original except for the distribution amount and taxes that may have been withheld because all taxes were reported in the first 1099R per my instructions.
9. After entering the information on the form, scroll through the program until it asks How much of the $10,000.00 was a RMD? in this instance, indicate that none was an RMD for the same reasons I outlined above.
10. When you reached a screen that asked Tell us if you moved the money through a rollover or conversion Here you will indicate you converted this $10,000 to a Roth IRA.
11. Then it will ask, Did you convert all of this $10,000.00 (Box 1) to a Roth IRA? You will say yes.
12. Next will be a summary screen for your 1099-R's. You will see the 1099-R split into two events. 
13. Now i check my preview screens and i now show that $20,000 is taxable because of the cash you kept plus the Roth conversion. I also see that the rollover is reported correctly.
14. Also I forget to mention, as you scroll through the screens after entering your traditional IRA rollover, you will reach a screen that says Tell Us the Value of Your Traditional IRA. This is where you make any adjustments to reconcile your 5498. 

[Edited 02-02-2021|02:04PST]