topic A taxable 403b to a Roth IRA conversion was treated as a non-taxable rollover by TurboTax even though the 1099R information was correct. How do I correct this? in Retirement tax questions

A taxable 403b to a Roth IRA conversion was treated as a non-taxable rollover by TurboTax even though the 1099R information was correct. How do I correct this?

rskidgel — Tue, 04 Jun 2019 00:17:50 GMT

I converted money from a 403b to a Roth IRA, which should be taxable. The correct taxable amount is in box 2a of the 1099-R and the correct distribution code G is in box 7 according to IRS instructions. However, TurboTax does not treat this as taxable income and the word "ROLLOVER" is printed on line 4b "taxable amount" of the 1040 form. How do I correct this? " I can get it to treat it as taxable if I put the incorrect distribution code (e.g. "normal distribution") in box 7.

Make sure that you did not inadvertently mark the IRA/SEP...

dmertz — Tue, 04 Jun 2019 00:17:51 GMT

Make sure that you did not inadvertently mark the IRA/SEP/SIMPLE box when entering the Form 1099-R into TurboTax.
Make sure that in the follow-up to entering the details of this Form 1099-R that you indicated that, yes, you rolled the money over to a Roth IRA account. (Be aware that TurboTax will default the answer to this question back to No if you edit this Form 1099-R and blindly step through all of the follow-up questions.)
Make sure to indicate in the follow-up that you made no after-tax contributions to the 403(b).

If checking these entries does not correct the problem, delete and reenter the Form 1099-R.

Note that having "ROLLOVER" on line 4b is correct for this transaction. The transaction is a technically a taxable rollover.

Thank you for the helpful response. I went back to the 1...

rskidgel — Tue, 04 Jun 2019 00:17:53 GMT

Thank you for the helpful response. I went back to the 1099-R form and carefully looked over it and found that the box on line B5 ("check this box if the entire amount on line B4 was converted to a Roth IRA") did not get checked when going through the interview questions. When I checked it directly on the form, the correct taxable amount appeared.

Solved in the comments. Yes, box B5 on TurboTax's 1099-R...

dmertz — Tue, 04 Jun 2019 00:17:54 GMT

Solved in the comments.

Yes, box B5 on TurboTax's 1099-R is the box that step-by-step mode marks when you answer Yes when asked if you rolled the money over to a Roth IRA, so marking this box in forms mode does the same thing.