topic Roth 401k/early withdrawal problems in Get your taxes done using TurboTax

Roth 401k/early withdrawal problems

Pedro9 — Mon, 25 May 2020 04:03:52 GMT

I can't tell if I'm missing a form, or not seeing where to enter this information in TurboTax.

In 2019 I rolled over a Roth 401k to a Roth IRA, (both Vanguard accounts). I immediately did an early withdrawal from the Roth IRA -- this was the motivation for the rollover.

I recieved in 1099-R from Vanguard, for the early distribution. My 1099-R has "Taxable amount not determined" checked, and box 5 (employee contributions) is blank.

About half of the money withdrawn was my contributions to the Roth 401k, thus I expected an early withdrawal penalty on half the amount.

TurboTax doesn't think any of my withdrawal is from my contributions and is showing me a gigantic tax liability, I assume from both the early withdrawal penalty, and the entire amount being considered income.

There is a field in EasyStep that asks me to enter "prior year Roth IRA contributions", but since I rolled over the same year, and my contributions were to the 401k, I am unsure whether to enter my contributions here.

Any advice on how I should go about fixing this?

Re: Roth 401k/early withdrawal problems

Pedro9 — Mon, 25 May 2020 04:19:47 GMT

Answering my own question, hope it helps someone. In this case, Vanguard had two additional 1099-Rs for the rollover, which for whatever reason were not available for download in TurboTax. After entering this manually, my tax liability went back to normal.

Re: Roth 401k/early withdrawal problems

macuser_22 — Mon, 25 May 2020 04:22:28 GMT

Yes, you enter them there. When you roll a designated Roth to a Roth IRA your prior contributions (basis), transfer to the Roth IRA are are treated as if they were Roth IRA contributions.