Why does Turbo Tax list my IRA rollover as income?

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One of my 1099-R forms has distribution code G for my rollover of a regular IRA from one bank to a regular IRA in another bank. It should not be counted as interest income as Turbo Tax has indicated. Help!

[VolvoGirl]

It's  not  on 1040 line 4a?  If it's in interest on line 2 you need to go into the interest section and delete it.  

Enter a 1099R under

Federal Taxes Tab or Personal (Home & Business)

Wages & Income at the top

Then scroll way down to Retirement Plans and Social Security,

Then IRA, 401(k), Pension Plans (1099R) - click Start or Revisit

If you are filing a Joint return be sure to pick which person it is for.

Don't enter the bank or broker name and don't try to import it.  It is just as fast and easy to manually enter it.  At the bottom pick -  Change How I enter my Form

Then on the next screen pick I'll Type it in Myself

[details]

Sorry I mislead you VolvoGirl. In my initial post, I made a mistake by saying "interest income" - I should have said "income" (I now made the correction) The rollover distribution is listed as income under my 1099-R Info section and gets added to my RMDs.  One of my 1099-R banks which received the rollover IRA includes the RMD for the rollover IRA. I received 1099-R forms from both bank so I thought I should enter info from both 1099-Rs. I thought the distribution code G would identify that it was a direct rollover and no taxes need to be paid on the amount.  Maybe I shouldn't worry about it right now, then when it is entered on my 1040A form it will be listed as non-taxable income. Any suggestions would be appreciated. 

[Hal_Al · Accepted solution]

Yes, don't worry about it until you actually enter it in TurboTax (TT).  The amount must be reported on your tax return (line 4a on form 1040). But TT will include 0 as the taxable part on line 4b and put the word "rollover" on the dotted line. 

[SweetieJean · Accepted solution]

The TT Income Summary only shows the gross numbers and is just FYI.  As indicated, both the gross and taxable figures appear on your actual tax return.

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Thanks to Hal_Al

[details]

Thanks to SweetieJean

[cherrycar1]

I have entered my Direct IRA rollover with code G, it keeps showing I owe about 32000 dollars in taxes after I enter this. How do I make it understand it is a direct roll over? Thank You Arnold

[Hal_Al]

It's working correctly on my desktop Deluxe (I had an update yesterday).  Go thru the interview again or  Try deleting the 1099-R and re-entering it.  In particular there's a question "Was this money rolled over to a Roth IRA?"  Be sure you answered No. 

If you did roll it over to a Roth, instead of a traditional IRA, then it is a "Conversion" and is taxable. 

[dmertz]

Is the amount in box 2a nonzero?  If so, the form is indicating a taxable rollover to a Roth account as Hal_Al indicated.

If box 2a of the Form 1099-R provided by the payer is blank, enter a zero in box 2a of TurboTax's 1099-R form.

[dyoon001]

i have 2 direct rollover IRA and Roth IRA but both amounts are showing up as taxable in line 4b when they were both total distributions as G and H, respectively, and boxes IRA/SEP/SIMPLE weren't checked.

[Hal_Al]

Box IRA/SEP/SIMPL should be checked, if rolled over from one IRA to another.  Otherwise, not.

[dmertz]

No, the IRA/SEP/SIMPLE should not be marked.  The rollovers that @dyoon001 did are from an employer plan like a 401(k), not from an IRA.

If box 2a of the code-G Form 1099-R has a nonzero amount in box 2a, this Form 1099-R is reporting a rollover to a Roth account, not a rollover to a traditional rollover IRA.  Assuming that box 2a of the code-G Form 1099-R is indeed nonzero, contact the plan to obtain a corrected Form 1099-R showing $0 in box 2a.  If box 2a does not have a nonzero amount, make sure that you have entered $0 into box 2a of TurboTax's 1099-R form and that you have answered No to each of the two questions asking if this distribution was rolled over to a Roth account.