topic 401k rolled over to a Roth IRA, never taxed on the amount in Retirement tax questions

401k rolled over to a Roth IRA, never taxed on the amount

ianw16 — Sat, 01 Jun 2019 07:13:38 GMT

My wife had a 401k from her prior job, after leaving the company she had the 401k rolled over into her Roth IRA plan. The company didn't withhold the 20% tax so I need to find out what I need to do to correct this.

What is the code in box 7 of the Form 1099-R provided by...

dmertz — Sat, 01 Jun 2019 07:13:40 GMT

What is the code in box 7 of the Form 1099-R provided by the 401(k) plan?
Is the IRA/SEP/SIMPLE box marked?
Is the amount in box 2a zero, nonzero or blank?
Is box 2b Taxable amount not determined marked?
Is there any amount shown in box 5?

Box 7 is code G IRA/SEP/SIMPLE box is not marked Box 2a i...

ianw16 — Sat, 01 Jun 2019 07:13:42 GMT

Box 7 is code G
IRA/SEP/SIMPLE box is not marked
Box 2a is $0.00
Box 2b Taxable amount is not marked, total distribution is marked.
Box 5 is blank

The Form 1099-R is reporting a rollover to a traditional...

dmertz — Sat, 01 Jun 2019 07:13:44 GMT

The Form 1099-R is reporting a rollover to a traditional IRA, not to a Roth IRA. If this Form 1099-R had been reporting a rollover to a Roth IRA, box 2a would show the same amount as is in box 1. This seems to be a common issue this year.

You must request that the 401(k) plan correct the Form 1099-R. If you actually requested that they initiate a rollover to a Roth IRA, they should comply, but often times will not. If they believe that you requested a rollover to a traditional IRA, they will almost certainly refuse to correct the Form 1099-R. If they will not correct the Form 1099-R, your only alternative will be to submit a substitute Form 1099-R showing the same amount in box 2a as is in box 1, explain your attempts to get the 401(k) plan to correct the Form 1099-R, and explain why the original Form 1099-R is incorrect. (I believe that this will prevent you from e-filing.)

The assumption here is that the rollover was directly fro...

dmertz — Sat, 01 Jun 2019 07:13:46 GMT

The assumption here is that the rollover was directly from the 401(k) to the Roth IRA. If she rolled directly from the 401(k) to a traditional IRA first, then converted the traditional IRA to Roth, she would receive a Form 1099-R from the traditional IRA for the distribution and conversion to Roth and it would be this Form 1099-R that would be reporting the taxable conversion.