topic Re: 401k rolllover in Retirement tax questions

401k rolllover

tomandkat — Wed, 12 May 2021 23:16:24 GMT

We received a 401k distribution, and rolled it over to Vanguard. Turbo Tax is showing it as income???

Re: 401k rolllover

SusanY1 — Thu, 13 May 2021 00:20:37 GMT

It should show it as income, but that income should be nontaxable.

Certain summary screens within the program show all items entered whether they are taxable or not and in this instance- so you may see it displayed here as "income", though it is not taxable.

Rollovers are also reportable on the tax return. On Form 1040 you should see the amount reported on Line 5a, but absent from Line 5b. If the transfer was a direct transfer with a code G in Box 7 on your 1099-R this will happen automatically.

If the rollover was indirect, be sure that you indicate that a rollover was made in the follow-up questions that TurboTax will ask after you complete the entry of all of your 1099-R forms.

Re: 401k rolllover

andcindy — Tue, 22 Feb 2022 18:40:41 GMT

I have the same issue, a rolled over 401k from my deceased husband is counted as income. The problem is that it raised my taxes due !!! even though it is not taxable income. How can I correct this?

Re: 401k rolllover

ThomasM125 — Tue, 22 Feb 2022 19:11:59 GMT

@andcindy After you enter your form 1099-R information, you will see a screen that says What Did You Do With The Money From (name of company?) You need to select the I moved the money to another retirement account and then I rolled over all of this money to another traditional IRA account options.

Re: 401k rolllover

andcindy — Tue, 22 Feb 2022 23:13:56 GMT

I entered the information that I rolled over the money from one 401k to another following my husband's death. The distribution code was 4 G. Box 2b said it was not taxable.

Nonetheless, the money was counted as income and raised the amount that I owed.

I don't know a way to correct this if the information is entered correctly, but the program is not treating it as non-taxable.

Re: 401k rolllover

jtax — Tue, 22 Feb 2022 23:30:42 GMT

@andcindy did you answer the questions detailed in the previous answers? ("what did you do with the money")

Re: 401k rolllover

andcindy — Tue, 22 Feb 2022 23:35:52 GMT

Yes, I said I rolled it into an existing 401k

Re: 401k rolllover

DawnC — Fri, 25 Feb 2022 22:57:25 GMT

What amount is on Line #5b of Form 1040? The distribution should show up on 5a, but not on 5b. If it is showing on 5b also, check to see if you have the 1099-R entered twice? Search for 1099-R and use the Jump to 1099-R link to view your 1099-R Summary Page. Verify you only have the one 1099-R (assuming you only have that one). If the summary looks alright, try deleting the 1099-R and re-entering it. Ignore the refund meter ;). There will be a delete button or trash can icon next to the 1099-R on the Summary page.

How to preview Form 1040

@andcindy