TTax 2024 won't use box 2a (taxable amount) to calculate federal tax instead using the gross distribution (box 1)

[Kaohsiung1940]

I have one 1099-R form of 2024 which combined two rollovers of 401k to Roth IRA 41397occurred in May and December.  I filled in the numbers as below to TTax, but instead using box 2a taxable amount to calculate my federal tax, the software used the gross distribution (box 1) to calculate.  This leads a large tax due

box 1: 130000

box 2a: 41397, 2b not checked, 

box 5: 62885 (this is my after-tax contribution to my employee's 401k plan when I was working a few years ago and now retired)

box 7: G and all the rests are blank or 0

I called Vanguard preparing 1099-R and was told box 2a is correct, although I thought box 1= box 2a + box 5.

For my case where box 1 is not equal to the sum of box 2a and box 5, TTax seems cannot use the right 2a for calculating federal tax, any suggestions, thanks

[dmertz]

The amounts in boxes 1, 2a and 5 of the Form 1099-R imply that Vanguard believes that $104,282 was rolled over to a Roth IRA and that $25,718 was rolled over to a traditional IRA.  If that's the case, for entry into TurboTax you must split the Form 1099-R into two, one with $104,282 in box 1, $41,397 in box 2a and $62,885 in box 5 for the portion rollover to the Roth IRA and another with $25,718 in box 1 $0 in box 2a and $ in box 5 for the portion rolled over to the traditional IRA.  TurboTax can't properly handle the entry of a code-G Form 1099-R that combines rollovers to traditional and Roth IRAs.

If the entire $130,000 was rolled over to a Roth IRA, the Form 1099-R provided by Vanguard is incorrect and should have $67,115 in box 2a.  Since Vanguard will not correct the Form 1099-R to reflect this, you would need to enter into TurboTax a substitute Form 1099-R (Form 4852) with explanation.  Doing so precludes e-filing.

[Kaohsiung1940]

Dear dmertz; thanks a lot for the clarification. I was wondering how did you figure out to have 2 1099-R and numbers for box 1,2a and 5.  For my case which is correct since in 2024 I did two 401k rollovers to Roth IRA one is 30k and the other is 100k.  But vanguard just gave me just one 1099-R. Thank you

[dmertz]

For an indirect rollover reported with code 1, 2 or 7, TurboTax actually tells you to split the form into two.  The same problem occurs with a direct rollover reported with code G because TurboTax only allows you to specify one destination account for the rollover, so the same kind of splitting is required.