topic Refund Decreased when I enter my 1099R in Retirement tax questions

Refund Decreased when I enter my 1099R

Anonymous — Sun, 02 Feb 2020 22:23:50 GMT

Why did my refund decrease when I entered my 1099R?

I rolled it over to a Roth IRA I didn't see any of that money. I'm just a little confused and I haven't filed yet because that seems wrong.

I noticed when I fill out all the information that matches the 1099R it asks me the following questions. (Note Distribution code is G)

Of course, when I answer truthfully, that it is reported and it did get rolled over to a Roth. The refund drops significantly.

I also noticed that if I change the Distribution code from G to H(This code just makes more sense to me) then it does not drop my refund, and doesn't ask me the questions above.

I really don't know what to do.

Do I need to report the rollover?

Re: Refund Decreased when I enter my 1099R

macuser_22 — Sun, 02 Feb 2020 22:41:20 GMT

Was the 401(k) a traditional 401(k) or a 401(k) Roth (designated Roth)?

A code "H" is for a 401(k) *Roth* (designated Roth) rollover to a Roth IRA which would not be taxable since the money was already after-tax money in the designated Roth.

A code "G" signifies a regular 401(k) direct rollover of before-tax money. If converted to a Roth IRA then unless there is an amount in box 5 of after-tax money, the distribution would be taxable.

Re: Refund Decreased when I enter my 1099R

NCperson — Sun, 02 Feb 2020 22:44:01 GMT

why are you answering no to both questions??????

why are you not answering 'yes' to the 2nd question????

Re: Refund Decreased when I enter my 1099R

macuser_22 — Sun, 02 Feb 2020 22:56:04 GMT

I believe the poster said when answer "truthfully" that it *was* rolled to a Roth then it becomes taxable and that is correct because conversion a before-tax 401(k) to a after-tax Roth IRA becomes taxable at the time of the conversion. Only if the 401(k) contained any after-tax money that should be in box 5 on the 1099-R would that amount not be taxable.

To be s non-taxable rollover a code G 1099-R 401(k) rollover would have to be rolled into a Traditional IRA and not a Roth IRA.

Is there any amount in box 5 on the 1099-R?

Answering yes to the 2nd (rollover to Roth IRA) question will then have another screen that asks if there are any any after tax contributions which would be the box 5 amount. Otherwise the entire box 1 amount will be taxable.

Re: Refund Decreased when I enter my 1099R

KarenM90 — Sun, 02 Feb 2020 22:57:19 GMT

Yes. You need to report the Rollover exactly as it was reported to you on the 1099R.

If it was rolled over from a pre-tax account (ie - a regular 401k that is holding "pre-tax" funds) you will owe tax when it is rolled over to a Roth IRA.

Please see the attached FAQ from IRS: Rollovers FAQ

Please note at the bottom of this FAQ: A conversion to a Roth IRA results in taxation of any untaxed amounts in the traditional IRA. The conversion is reported on Form 8606.....

Re: Refund Decreased when I enter my 1099R

Anonymous — Mon, 03 Feb 2020 04:38:22 GMT

Thanks this helps a lot. Sucks that it has to be this way now, but this will be worth it in the end.

I appreciate you 😊