topic Re: 1099-R Distribution in Get your taxes done using TurboTax

1099-R Distribution

SG56 — Sat, 13 Mar 2021 22:02:54 GMT

My wife received 2 1099-R forms for a total distribution from an employer pension plan. Part of this distribution was rolled over to a qualified IRA and part was used/cashed out. While entering both 1099-R's it looks like we received more money that was distributed. While part of the total distribution was rolled over and part cashed out, it is combining both amounts from the 1099-R's. Should this be the case?

For instance, as an example actual should be:

Total distribution - $150,000

Amount cashed out - $50,000

Rolled over - $100,000

Total Retirement Income - $150,000

Turbo Tax is reporting the following:

Total distribution $150,000

Amount cashed out $50,000

Rolled over - $150,000

Total Retirement Income - $200,000

Re: 1099-R Distribution

VolvoGirl — Sat, 13 Mar 2021 22:08:25 GMT

If you are looking at a summary screen or review screen those show the full amount as income and lump a lot of stuff together. You need to check the actual 1040 form and make sure it's right. Check line 5. It should say ROLLOVER and the right taxable amount on 5b.

Before filing, You can preview the 1040 or print the whole return

https://ttlc.intuit.com/community/accessing/help/how-do-i-preview-my-turbotax-online-return-before-filing/00/26160

Re: 1099-R Distribution

SG56 — Tue, 16 Mar 2021 22:48:59 GMT

It does show rollover and 0 tax owed, but again the total amount distributed e wrong amount when you add what was cashed out (line 4) and the amount rolled over (line 5). Not sure if that matters.

Re: 1099-R Distribution

VolvoGirl — Tue, 16 Mar 2021 22:59:09 GMT

This is confusing. Why did she get 2 1099R? What is the codes in box 7? Are the taxable amounts right on lines 4b and 5b?

Is one 1099R from the IRA for the cash out? Did she first roll over the total distribution from the Pension to the IRA and then take the cash from the IRA? Then it will look like more was distributed. But that's ok as long as the taxable amounts are right. @dmertz did I figure it out right?

Re: 1099-R Distribution

dmertz — Tue, 16 Mar 2021 23:27:34 GMT

VolvoGirl, I think your guess is a reasonable one, that $150,000 was first rolled over to a traditional IRA ($150,000 of nontaxable income) and subsequently a $50,000 distribution was made from the traditional IRA ($50,000 of taxable income). The total of nontaxable and taxable income is therefore $200,000. Only the $50,000 of taxable income has any effect on the rest of the tax return. Had the $50,000 cash been distributed directly from the pension plan, a minimum of 20% ($10,000 ) would have been required to have been withheld for taxes, so rolling everything over to the traditional IRA first avoids that mandatory 20% withholding.

Re: 1099-R Distribution

SG56 — Wed, 17 Mar 2021 20:09:18 GMT

You did figure this out correctly. That is the way the transactions were completed. The taxable amounts on lines 4b and 5b are correct. Thanks