topic 1099-R for Pension direct rollover to Roth IRA in Retirement tax questions

1099-R for Pension direct rollover to Roth IRA

al201 — Mon, 15 Mar 2021 05:44:03 GMT

I did a direct rollover of a Pension into a Roth IRA account. I received 2 1099-R forms, one from my old employer's pension, and one from Fidelity where my Roth IRA account is. When I report both 1099-R forms, it looks like Turbotax double counts my IRA distributions (ex if the distribution was $1,000, Turbotax lists $2,000 under my 1099-R).

Is this correct? I'm worried the rollover is being double counted

Re: 1099-R for Pension direct rollover to Roth IRA

dmertz — Mon, 15 Mar 2021 06:20:30 GMT

This suggests that you did not do a direct rollover from the pension plan to the Roth IRA but instead did a direct rollover to a traditional IRA and then did a Roth conversion from the traditional IRA to the Roth IRA.

What is the code in box 7 of the Form 1099-R from the pension plan?

Is the IRA/SEP/SIMPLE box marked?

Is the amount in box 2a of this form zero?

Any amount in box 5?

What is the code in box 7 of the Form 1099-R from Fidelity?

Is the IRA/SEP/SIMPLE box marked?

Re: 1099-R for Pension direct rollover to Roth IRA

al201 — Mon, 15 Mar 2021 23:18:35 GMT

Thank you! Yes you are correct, it was a direct rollover to a traditional IRA and then a Roth conversion. Responses below in below. In this case, is it correct for Turbotax to "double counting" the rollover amount?

What is the code in box 7 of the Form 1099-R from the pension plan? G

Is the IRA/SEP/SIMPLE box marked? No

Is the amount in box 2a of this form zero? Yes

Any amount in box 5? None

What is the code in box 7 of the Form 1099-R from Fidelity? 2

Is the IRA/SEP/SIMPLE box marked? Yes

Re: 1099-R for Pension direct rollover to Roth IRA

dmertz — Tue, 16 Mar 2021 00:00:59 GMT

These Forms 1099-R correctly correspond to the fact that the rollover from the 401(k) was to a traditional IRA and that there was a subsequent Roth conversion from the traditional IRA. Both are transactions are reportable and each will add to the total reportable income but only the Roth conversion will add to taxable income.

When entering the code G From 1099-R, answer No when asked if the rollover was to any kind of Roth account. The result will be that the gross amount will appear on Form 1040 line 5a but none of it will appear as taxable on line 5b. The word ROLLOVER will appear next to the line.

When entering the code 2 Form 1099-R, indicate that you moved the money to another retirement account, Depending on the version of TurboTax, you can either indicate that you converted the entire amount to Roth or, if that option is not present, indicate that you did a combination of rolling over, converting or cashing out and indicate in the amount-converted box the amount converted (the amount in box 1). TurboTax will include on line 4b the taxable amount converted (the entire amount unless you have basis in nondeductible traditional IRA contributions.

The TurboTax summary will show the total of these two transactions, perhaps separately identifying nontaxable and taxable income. Only the Roth conversion will appear in taxable income.