topic Re: Problem with reporting IRA rollovers in Retirement tax questions

Problem with reporting IRA rollovers

CAC — Thu, 14 Feb 2019 02:49:16 GMT

The 2018 version does not ask if an IRA distribution from a 1099-R was rolled over (only asks if it was transferred to charity or HSA), thereby making the distribution fully taxable. This is a problem if the distribution was rolled over to another IRA account.

Re: Problem with reporting IRA rollovers

NCperson — Thu, 14 Feb 2019 13:38:24 GMT

on the 1099-R form....

what is the code in Box 7?

is the amount in Box 2a zero or something else?

and are you confident you have copied that correctly into TT?

Re: Problem with reporting IRA rollovers

IsabellaG — Thu, 14 Feb 2019 17:59:10 GMT

When you enter your 1099-R in TurboTax, in a subsequent screen you will be asked What Did You Do With The Money From This Payer? If you check that you moved the money into another retirement account, a drop-down will appear, and you'll see a place to indicate that you've rolled over either all or part of the distribution.

Re: Problem with reporting IRA rollovers

IsabellaG — Thu, 14 Feb 2019 18:07:07 GMT

Also, if you are over the age of 70 1/2, you are required to take a minimum amount of money, the Required Minimum Distribution (RMD) as a distribution each year. That would be why you are seeing a question about transferring the money to a charity. But you will still see the What Did You Do With The Money? screen later in the interview.

Re: Problem with reporting IRA rollovers

CAC — Sat, 16 Feb 2019 14:06:38 GMT

Thank you for your reply. The problem is the "what did you do with the money" question does not appear. An IRA account was closed and moved to another institution. The RMD was taken and the remainder rolled into another IRA at a different institution. I received a 5498 form for the rollover from that institution. The 1099-R indicates a full distribution (boxes 1, 2a, 7, IRA/SEP/Simple). I tried entering the RMD amount as the taxable amount for 2a but that didn't work (taxes are still calculating on the full amount). The only thing that works is entering the RMD amount in boxes 1 and 2a so I will have to go with that, despite not matching the 1099-R.

Re: Problem with reporting IRA rollovers

CAC — Sat, 16 Feb 2019 14:11:44 GMT

Thank you for your reply. Yes I am confident I am entering the information correctly. I have tried all combinations of responses and none triggers a question asking what I did with the money (other than charity or HSA). The RMD was taken and the remainder rolled over to a new account. The only entry that does not generate taxes on the full amount is using the RMD amount in boxes 1 and 2a.

Re: Problem with reporting IRA rollovers

NCperson — Sat, 16 Feb 2019 14:21:03 GMT

DO NOT OVERRIDE WHAT IS ON THE FORM - you are asking for more trouble!!!!! Let's fix this issue now and avoid real issues much later!

those forms were sent by the trustee to the IRS and if you report it wrong, the TT warentee is invalidated - they will not cover any additional taxes or penalties that you may suffer.

Let me see if I can help you out. Please answer the questions below for EACH 1099 you received.

1) are you under or over 59.5 years old? (I suspect you are over 70.5 since you mentioned an RMD)

2) what code is in Box 7? and is the IRA / SEP box checked?

3) is the amount in Box 2a zero or some other figure (I don't need to know what that dollar figure is)

4) if box 2a is not zero, does it match box 1? (again, I don't need to know the exact dollar figure)

please answer this for each 1099 you have.

Re: Problem with reporting IRA rollovers

CAC — Sat, 16 Feb 2019 14:24:44 GMT

Thank you. Yes over 59.5, box 7 code is 7 and the IRA/SEP/Simple box is checked. Boxes 1 and 2a match. I cannot get Turbo Tax to trigger the correct question; I think it's a bug.

Re: Problem with reporting IRA rollovers

NCperson — Sat, 16 Feb 2019 14:54:14 GMT

are you using the online or desktop version of Turbo Tax? and if desktop, is it premiere, deluxe or basic?

I just tested your answers in Desktop Deluxe and it worked correctly. There should be no need to override and it is not a bug!!!!

the fact that Box 7 is a 7 indicates you received the money.

How did you move the money from the 1st trustte to the 2nd trustee. If it was a direct rollover (i.e. you never saw the check), that code in Box 7 should have been a G.

Did you get the rollover check from the 1st trustee and then you sent it to the 2nd trustee (within 60 days) or did the 1st trustee send it directly to the 2nd trustee? and that Form 5498 who sent it to you, the 1st trustee or the 2nd trustee (please look closely!)

Please confirm that the dollar amount on Form 1099 in Box 1 or 2a (since they are the same) reflects the amount that rolled over or does it reflect the amount of the RMD?

trying to help you out here so this doesn't get worse!

Re: Problem with reporting IRA rollovers

CAC — Sat, 16 Feb 2019 15:04:07 GMT

Thank you. I appreciate your help. I'm using the online version not the desktop version. Can you test that? The 1099-R reflects the amount of the total distribution and code 7 is correct because I took the money and deposited to the new institution on the same day. The rollover amount is the total minus the RMD. It all nets correctly but the online version does not ask what I did with the money.

Re: Problem with reporting IRA rollovers

CAC — Sat, 16 Feb 2019 15:06:16 GMT

Apologies...online premier.

Re: Problem with reporting IRA rollovers

CAC — Tue, 19 Feb 2019 23:12:15 GMT

Has anyone been able to confirm a bug with the online version?

Re: Problem with reporting IRA rollovers

CAC — Fri, 22 Feb 2019 01:35:58 GMT

Unfortunately I can't use TurboTax due to the inability to report my IRA rollover correctly so I switched to H&R Block. Thank you.

Re: Problem with reporting IRA rollovers

Bamboo — Fri, 22 Feb 2019 17:44:44 GMT

I had a similar issue. RMD plus regular withdrawal plus Roth conversion and QCD. All except the QCD were reported on the same 1099. When I tried to enter exactly as shown on the 1099 I had a TT message that it couldn't handle that and I would need to report on separatae 1099s. So I entered 3 different 1099s and everything worked correctly. Might give that a try.

Re: Problem with reporting IRA rollovers

CAC — Sat, 23 Feb 2019 18:03:58 GMT

Thank you. My issue was a RMD and indirect rollover (moved to another account within 60 days) on one 1099R (all code 7 distribution). The 1099R is correct; Turbo Tax asks if the distribution was a full or partial RMD but assumes the difference between the distribution amount and the RMD amount is a distribution. It does not prompt a question about whether or not the difference was rolled over (just if it went to a charity or HSA) so it calculated taxes on the full amount. If I entered the rollover amount as a separate 1099R with a rollover code it works, but I was advised to enter the information exactly as it appears on the 1099R. I never heard back from Turbo Tax (other than the desktop version works) so I used H&R Block with no issues. It handled my rollover correctly.

Re: Problem with reporting IRA rollovers

marquez431 — Sun, 24 Feb 2019 04:02:54 GMT

Isabella G:

Thank you so much for this advice. It worked exactly as you stated for my situation with a RMD. I had a Qualified Distribution amount plus too much was withdrawn for my RMD and I had to rollover that overage back into the original IRA.

Your example and descriptions led me to be able to input everything I needed to complete this challenging situation!!

NLH

Re: Problem with reporting IRA rollovers

Bamboo — Sun, 24 Feb 2019 04:50:35 GMT

Thanks for letting me know and I'm glad it helped!

Re: Problem with reporting IRA rollovers

CAC — Sun, 24 Feb 2019 13:18:05 GMT

The desktop version of Turbo Tax can handle the rollovers; the online version cannot. They should both work the same way; however anyone with rollover situations should ensure he/she uses the desktop version (or another software as I did).

Re: Problem with reporting IRA rollovers

ggold91364 — Fri, 08 Mar 2019 22:02:25 GMT

I read your answer to another user and I have a similar problem. I did a Trustee-to-Trustee IRA transfer. The 1099-r from the paying trustee incorrectly reported distribution code 7. When I contacted them (Fidelity Investments) they claimed not to worry (and they won't fix it) because they said IRS will match the CORRECTLY completed Form 5498 from the receiving trustee and deduct it from my taxable income! But TurboTax then won't report my tax correctly. I'm using the 2018 H&B desktop version. It does not have a "what did you do with the money" box that I can find. I see only an option to CORRECT the 1099-R. But if I do that, will I lose the ability to e-file? I have all the evidence to show it was a direct trustee-to-trustee rollover. I actually had two of them from two different IRAs. One from Fidelity and another from a different IRA but both use National Financial Services LLC as their agent for preparing the 1099s and they refuse to fix these

Re: Problem with reporting IRA rollovers

Bamboo — Sat, 09 Mar 2019 00:15:10 GMT

If you never received the funds then Fidelity should not have issued a 1099. One option is to report it as shown on the 1099 but indicate it was rolled over within 60 days. This gets it out of taxable income, which is what you want. A concern here might be if there is another 60 day rollover within a year; if there isn't then you shouldn't have a problem. Don't know if you can attach a statement to the return indicating it was a trustee-to-trustee transfer?

Bottom line for me would be: 1) show the 1099 on the return so it isn't kicked out , and 2) get the money out of taxable income. I would definitely not report the income and rely on the IRS to back it out of taxable income by matching to receiving institution's 5498!

Good luck