topic The forms mode is great for checking data, but direct ent... in Retirement tax questions

20K converted fr 403B to Roth IRA. 1099R shows taxable 20K, code "G". T-Tax shows 0 taxable, and also on line 16 "Pension" (wrong), not on line 15 "Reti" (right). Pls adv

tt11374 — Wed, 05 Jun 2019 00:27:01 GMT

I converted 20K from 403b to a Roth IRA acct in 2017. Got 1099R form (from Prudential hosting 403b, hard copy), showing 20K in box 1 "total distribution" , 20K in box 2a "taxable amount", and code "G". When the info is entered in 1040 on line 15 "Retirement Plan.." (via the underlying 1099-R form), line 15 becomes blank, and line 16 (Pension/Annuity) shows 20K, and 16a "Taxable amount" shows "0"!

I suspected the code is wrong, but Prudential says "G" is correct for this transaction.

I understand the 20K is taxable, and I expect to see info on line 15.

Pls clarify and advise on how to resolve the issue.

Thanks

There shouldn't be a taxable amount in box 2a if its a co...

Lisa995 — Wed, 05 Jun 2019 00:27:02 GMT

There shouldn't be a taxable amount in box 2a if its a code G. You may want to call the bank that issued it ask for an explanation or a corrected 1099R.

The $20k taxable amount in box 2a is correct on this code...

dmertz — Wed, 05 Jun 2019 00:27:04 GMT

The $20k taxable amount in box 2a is correct on this code G Form 1099-R reporting a direct rollover from a traditional account in a qualified plan to a Roth IRA.

Form 1040 line 16 is the correct line for reporting this rollover from the 403(b) to the Roth IRA. Since the entire amount being reported on line 16 is taxable, the correct indication on line 16 is a blank line 16a, $20k on line 16b and the word ROLLOVER next to the line.

If line 16b is not showing the $20k as taxable, edit this 1099-R form in TurboTax and make sure in the follow-up to indicate that you rolled the entire amount to a Roth IRA (not to a Roth 401(k)). If this doesn't cause the $20k to appear on line 16b with the ROLLOVER notation, delete and reenter the Form 1099-R.

really, code G with a taxable amount? I haven't run acro...

Lisa995 — Wed, 05 Jun 2019 00:27:05 GMT

really, code G with a taxable amount? I haven't run across any of these yet.

It is a rollover/conversion of pre-tax 403 money to after...

macuser_22 — Wed, 05 Jun 2019 00:27:07 GMT

It is a rollover/conversion of pre-tax 403 money to after-tax Roth. Taxable, just like a Traditional IRA to Roth conversion.

I have several in my collection. ;-)

dmertz — Wed, 05 Jun 2019 00:27:08 GMT

I have several in my collection. 😉

I have clients that roll an IRA into a ROTH, but they hav...

Lisa995 — Wed, 05 Jun 2019 00:27:09 GMT

I have clients that roll an IRA into a ROTH, but they have a Code 7 on them, not a G. Good to know, I'll keep an eye out for this.

Right. A Roth conversion from a traditional IRA is repor...

dmertz — Wed, 05 Jun 2019 00:27:11 GMT

Right. A Roth conversion from a traditional IRA is reported differently and would appear on Form 1040 line 15. The situation described in this question instead involves a direct rollover from a traditional account in a 403(b) to a Roth IRA.

Thank you all for the answer and comments. Recap: In 201...

tt11374 — Wed, 05 Jun 2019 00:27:12 GMT

Thank you all for the answer and comments. Recap: In 2017 converted 20k from a Prudential 403b to a bank Roth IRA. Age 60. Not retired yet. Got hard copy 1099-R from Prudential, showing: 20k in 1 "Gross distribution", 20k in 2a "Taxable amount", and "G" in 7 "Distribution code(s), with "IRA/SEP/SIMPLE" unchecked. The data is entered as is into TurboTax 1099-R. Result: on 1040 form, line 16a "Pension and Annuities" shows "20k", 16b "Taxable amount" shows "0", with "ROLLOVER" next to it. Prudential says "G" is correct code.
dmertz, to fix the issue, you suggested "make sure in the follow-up to indicate that you rolled the entire amount to a Roth IRA..". Could you explain"in the follow-up"? Is that part of the questions and answers, or...? (I'm using forms view directly.) I'd like to try but don't know where to start. Thank you very much.

The forms mode is great for checking data, but direct ent...

macuser_22 — Wed, 05 Jun 2019 00:27:15 GMT

The forms mode is great for checking data, but direct entry voids the TurboTax accuracy guarantee.  The interviews ties forms and answers together.   Entering directly in the forms mode requires that you know exactly how to do it,

I suggest deleting the 1099-R, switch to the interview and enter the 1099-R in the 1099-R section as below.

Enter a 1099-R  here:

Federal Taxes,
Wages & Income
I’ll choose what I work on (if that screen comes up),
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR Use the "Tools" menu  (if online version under My Account) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type:  Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

If this was a  rollover or conversion, answer the question that you moved the money to another retirement account (can be the same account).  The screen will open up with choices of where it was moved.

(If box 7 has a code “G” it will automatically be a trustee-to-trustee rollover).

Answer no to the first 401(k) Roth screen and YES to the Roth IRA screen.

That should place the taxable box 2a amount on line 16b with ROLLOVER next to it.

macuser, much appreciation for such clear and detailed in...

tt11374 — Wed, 05 Jun 2019 00:27:16 GMT

macuser, much appreciation for such clear and detailed instructions! I will try the steps in interview mode, and let know the result.

macuser, YES, the interveiw mode fixed it! Exactly as yo...

tt11374 — Wed, 05 Jun 2019 00:27:17 GMT

macuser, YES, the interveiw mode fixed it! Exactly as you said. Now 16a shows "0" and 16b shows 20k with "ROLLOVER".
(The only question I felt a bit uncertain about is the "Distribution Source" with a list of public plans/authorities,etc. I could not find 403b anywhere, and just contiuned with the default choice "None of above (select for 457h)". I assume the main thing is for IRS to see that the 20k is reported as taxable, just as shown in hardcopy 1099-R".)
Once again, many thanks for going out of your way to help out.

I assume the "Distribution Source" is in the state interv...

macuser_22 — Wed, 05 Jun 2019 00:27:19 GMT

I assume the "Distribution Source" is in the state interview. I know of no question like that in the Federal 1099-R interview. I really do not know the various state requirements.

Probably. (I'm from NY state.) I'm new to all this. Glad...

tt11374 — Wed, 05 Jun 2019 00:27:20 GMT

Probably. (I'm from NY state.) I'm new to all this. Glad I'm making progress with 1040, and will worry about state forms when I get there. Thanks again!