topic Helpful! Thank you! in Retirement tax questions

What form for in-plan 401(k) Roth conversion "income"?

Torpotax — Mon, 03 Jun 2019 17:13:45 GMT

In December 2018 I made an in-plan conversion of funds within my 401(k) plan, from original non-Roth to Roth. Just as with a Traditional to Roth IRA conversion, I know the money converted will be taxed as ordinary income.

But, I can't figure out where to report it in TurboTax. I can't even find a web reference stating which IRS form to use. It's most likely Form 8606, Lines 16 and 18. But all the text there is specific to IRAs, with no mention of 401(k)s, which concerns me.

Form 8606 takes me to creating a Form 1099-R, since the financial institution hasn't sent one. There I entered the $$ in Box 1 Gross Distribution and in Box 2a as the Taxable Amount. In Box 7 I selected '7' for the 1st code (normal IRA distribution), and left the 2nd code blank. This resulted in Box B4 showing the conversion $$ amount, and I checked the box under that.

On Form 1040, the conversion $$ amount appeared in Line 4b as I think it should.

Does anyone actually know - as opposed to guessing like me - the correct place / codes etc?

If the In-plan Roth Rollover occurred in 2018, your 401(k...

dmertz — Mon, 03 Jun 2019 17:13:46 GMT

If the In-plan Roth Rollover occurred in 2018, your 401(k) plan is required to have issued to you a 2018 Form 1099-R reporting this. It must have code G in box 7.

If you don't have the Form 1099-R from the plan, contact them to obtain the missing form. Don't try to complete the 1099-R entry without it. (If you haven't received the Form 1099-R, it might be because the transaction did not occur until 2019, in which case it's 2019 income, not 2018 income.)

Helpful! Thank you!

Torpotax — Mon, 03 Jun 2019 17:13:47 GMT

Helpful! Thank you!

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

qofmiwok — Mon, 08 Jul 2019 23:41:26 GMT

Your answer is regarding In-Plan Roth Rollover, and the question was about In-Plan Roth Conversion. Are these the same thing, just different terminology? I am used to conversion meaning "to Roth" and rollover meaning "traditional to traditional or roth to roth." If so, what do you do if your incompetent 401k administrator refuses to give you a 1099R and you need to file? I don't see a "substitute form 1099R" box to check.

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

macuser_22 — Tue, 09 Jul 2019 00:26:07 GMT

@qofmiwokA in plan Traditional 401(k) to 401(k) Roth rollover *is* a conversion.

They do not have an option to not issue a 1099-R - that is required by law by January 31 following the year of the rollover/conversion.

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

dmertz — Tue, 09 Jul 2019 00:58:01 GMT

In the language of the tax code, the term "conversion" is only used for moving money from a traditional IRA to a Roth IRA. Any movement from a traditional account in a qualified retirement plan like a 401(k) to a Roth account, either in-plan or to a Roth IRA, is a technically a rollover, not a conversion. The result is essentially the same, but the legal jargon differs.

Because the result is essentially the same, TurboTax tends to refer to any of these types of movement of funds from a traditional account to a Roth account as a "conversion" even though that is technically a misuse of the term in the case were the distributing account is a traditional account in a qualified retirement plan. In answers that I provide, I try to used the correct legal terminology rather than common misusage, except in cases where I'm referring to specific text in TurboTax.

Any movement of funds from the any account in the 401(k), including an In-Plan Roth Rollover, constitutes a reportable distribution for which the plan is required to issue a Form 1099-R for the year in which the distribution occurs. The "I need to prepare a substitute 1099-R" box is on the page where you identify the type of 1099-R you are entering.

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

qofmiwok — Tue, 09 Jul 2019 01:13:04 GMT

I understand. But what if you can't get them to do it? How many hours are you required to spend trying to make it happen?

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

dmertz — Tue, 09 Jul 2019 01:56:15 GMT

There is no set amount of time. The IRS frowns on entities failing to generate required Forms 1099 and W-2, so contacting the IRS as indicated in Tax Topic 154 might result in the IRS contacting the plan:

https://www.irs.gov/taxtopics/tc154

Otherwise, submit the substitute Form 1099-R (Form 4852) on which you are asked to describe your efforts to obtain the required form. I believe submitting the substitute form precludes e-filing, so you'll have to mail your tax return.

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

qofmiwok — Tue, 09 Jul 2019 02:41:07 GMT

Thank you!

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

ari444 — Wed, 02 Oct 2019 03:57:32 GMT

I have the same exact problem, and I don't know what codes I need to use when converting a portion of 401k to Roth 401k (Not IRA!). Which codes did you end up using?

Thanks!

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

qofmiwok — Wed, 02 Oct 2019 04:09:03 GMT

After about 50 phone calls and messages, I finally got my 1099R. But I can't believe this, I was just looking at it to tell you the boxes, and it's wrong! The amount of the conversion goes in Box 1. But they put a letter G in my Box 7 and checked the IRA/SEP/Simple next to it. So I'm back to the drawing board! And sorry, I don't know exactly what it should look like.

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

ari444 — Wed, 02 Oct 2019 04:13:09 GMT

I know all of my rollover is taxable as income, but when I use code G, Turbotax tells me I don't owe anything which is wrong. I don't have any IRA/SEP/Simple accounts!

My bank refuses to send me a 1099-R for 2018 even though the rollover was done on Dec. 28 2018.

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

macuser_22 — Wed, 02 Oct 2019 04:21:09 GMT

@ari444 If this was a direct 401(k) to Roth IRA rollover/conversion and you never say the money then the 1099-R should have a code G in box 7, the amount of rollover in box 1 and 2a unless the 401(k) contained after-tax money that is not taxable, then that would be in box 5 which reduces the box 2a amount by the box 5 amount. The IRA/SEP/SIMPLE box is never checked for a 401(k).

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

qofmiwok — Wed, 02 Oct 2019 04:21:52 GMT

OK, from the IRS instructions for 1099R: "For a direct rollover of a distribution from a section 401(k) plan, a section 403(b) plan, or a governmental section 457(b) plan to a designated Roth account in the same plan, enter the amount rolled over in box 1, the taxable amount in box 2a, and any basis recovery amount in box 5. Use Code G in box 7." There is no way eTrade will turn mine around in 2 weeks so I guess I'll be doing a substitute one also.

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

macuser_22 — Wed, 02 Oct 2019 05:01:51 GMT

@ari444 wrote:

My bank refuses to send me a 1099-R for 2018 even though the rollover was done on Dec. 28 2018.

What was done on Dec. 28, 2018? Is that when you deposited the check form the 401(k) plan made out to your IRA in the bank or is that when you instructed the 401(k) plan trustee to make the transfer to the bank?

Your bank does not send the 1099-R that is sent by the 401(k) plan trustee.

If you took the rollover distribution form the 401(k) in 2018 then you should have received a 1099-R form from the 401(k) plan trustee no later then Jan 31, 2019. If you did not receive it then contact the 401(k) plan trustee.

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

macuser_22 — Wed, 02 Oct 2019 04:44:22 GMT

@qofmiwok -See my answer to @ari444 . e-trade does not issue the 1099-R - the 401(k) plan administrator does. A 1099-R reports a distribution and yiu took the distribution from the 401(k) plan. The 401(k) plan administrator is required by law to issue the 1099-R no later then Jan 31 following the year of the distribution which would be Jan 31, 2019 for a 2018 distribution. Call the 401(k) plan administrator.

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

ari444 — Wed, 02 Oct 2019 04:47:12 GMT

Again, this was not an IRA account. this roll over was from a 401k to Roth 401k. No IRA accounts involved.

I made the request online on Dec 28th, 2018, and it was completed on the same day based on their own records and confirmation. They claim I missed the deadline by one day (Dec 27), so they're reporting it for 2019! This is wrong! As far as IRS, if it was dated prior to Dec 31, it must be reported for that year.

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

macuser_22 — Wed, 02 Oct 2019 05:01:19 GMT

@ari444 wrote:

Again, this was not an IRA account. this roll over was from a 401k to Roth 401k. No IRA accounts involved.

I made the request online on Dec 28th, 2018, and it was completed on the same day based on their own records and confirmation. They claim I missed the deadline by one day (Dec 27), so they're reporting it for 2019! This is wrong! As far as IRS, if it was dated prior to Dec 31, it must be reported for that year.

(And I meant to say 401(k) Roth, not Roth IRA).

That is very common and normal for the plan documentation to say that it is the posting date that is reported which can take 2-3 days. Since Dec 28 was a Friday, and Monday was a holiday then the posting date would be Jan 2, 2019. That is not unusual at all. That is why I always tell everyone to never wait to the last business day of the year or it will not get posted to the next year and the IRS will go by the year on the 1099-R form.

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

qofmiwok — Wed, 02 Oct 2019 14:05:10 GMT

Mine is a solo 401k with eTrade; they are my plan administrator and issue all the tax forms. They just don't seem to know what they are doing. First they issued a 2018 5498, which they acknowledged was wrong. Then after months and months of saying it was in process, they finally issued this 2018 1099-R last week which is also wrong. I know they were "required" to issue one by Jan 31, 2019, but it's not like I can make them do this right. I have contacted them dozens of times and they just seem to pass the information along to someone else. Maybe it's outsourced but I don't know who it's outsourced to.

Re: If the In-plan Roth Rollover occurred in 2018, your 401(k...

macuser_22 — Wed, 02 Oct 2019 14:58:03 GMT

@qofmiwok wrote:

Mine is a solo 401k with eTrade; they are my plan administrator and issue all the tax forms. They just don't seem to know what they are doing. First they issued a 2018 5498, which they acknowledged was wrong. Then after months and months of saying it was in process, they finally issued this 2018 1099-R last week which is also wrong. I know they were "required" to issue one by Jan 31, 2019, but it's not like I can make them do this right. I have contacted them dozens of times and they just seem to pass the information along to someone else. Maybe it's outsourced but I don't know who it's outsourced to.

You can prepare a substitute 1099-R as dmertz said above. Select the "I need to prepare a substitute 1099-R" box in the 1099-R type screen. The interview will ask for an explanation as to why you are using a substitute,a then ask the steps that you took to get it corrected. Just repeated what you said above.

(Personally I would find a different trustee that knows what they are doing to administrate my account.)