topic Using the desktop software, in the forms mode for the 860... in Retirement tax questions

How do I report nondeductible IRA contributions when the after tax amount is from the rollover of a 401K plan

jazz47 — Thu, 06 Jun 2019 14:12:50 GMT

I had after tax amount in my 401K plan. In 2002 I rolled over my 401K to traditional IRA. Now the traditional IRA has the after tax amount. This year is the first year I will get the distribution from my IRA account. I need to file 8606 form. But I don't know in which column I should enter the after tax amount since it is not a contribution to this IRA account, it was carried over from 401K account.

In which column on form 8606 do I enter the explanation i...

jazz47 — Thu, 06 Jun 2019 14:12:52 GMT

In which column on form 8606 do I enter the explanation indicating the adjustment is after tax money rolled over from 401K?

Using the desktop software, in the forms mode for the 860...

macuser_22 — Thu, 06 Jun 2019 14:12:55 GMT

Using the desktop software, in the forms mode for the 8606 form, directly above line 2 is a "Traditional IRA Basis Smart Worksheet". Line "C" in that worksheet is a "quickzoom" to the explanation statement.

Or enter it as dmertz explained below using the easy guid...

macuser_22 — Thu, 06 Jun 2019 14:12:57 GMT

Or enter it as dmertz explained below using the easy guide which will ask for the statement.

The after-tax amount rolled over from the 401(k) plan mus...

dmertz — Thu, 06 Jun 2019 14:12:59 GMT

The after-tax amount rolled over from the 401(k) plan must be included on Form 8606 line 2 and an statement needs to be included with your tax return to explain this adjustment to your basis in nondeductible traditional IRA contributions.

In TurboTax, after entering the From 1099-R for the distribution from the traditional IRA and answering the immediate follow-up questions, click the Continue button on the Your 1099-R Entries page and proceed to where TurboTax asks if you made any nondeductible contributions to your traditional IRAs. Answer Yes, then click the EasyGuide button on the Let's Find You IRA Basis page. Proceed to where your can mark the box to indicate that you transferred money from an employer's plan to an IRA, click Continue, then enter the after-tax amount rolled over from the 401(k) and click Continue again. Finally, enter the explanation indicating that this adjustment is for after-tax money rolled over from the employer plan and continue through the rest of this section. TurboTax will place the after-tax amount on line 14 of the IRA Information Worksheet in TurboTax, to be included on Form 8606 line 2.