ROLLOVER DIDN'T TAKE TAXES OUT, SO I PERSONALLY ADDED THEM TO THE ROLLOVER ACCOUNT...AND WANT TO KNOW IF o CAN GET A CREDIT OR DEDUCTION

[THE_STEINMANS]

Hi -

My wife had a 401k retirement account with a company that she left.   It had a minimal amount of money in it  and we didn't see the letter telling us they were going to close that account and needed to either roll over the money in a certain time period, or they would just send us a check.   So, they closed it out an sent us a check.   However, we wanted to roll it into an IRA, but they had already sent the check and took out the taxes.   So...we rolled over the check into an IRA, and at the same time wrote a personal check to deposit that covered the taxes that they had taken out.   Is there some way we can get a deduction, or credit, for paying (depositing) those taxes that we paid out of our own money.  How is that done.   I have Turbo Tax Deluxe.

[DanaB27]

You can enter in TurboTax that you rolled the distribution over to an IRA and added the amount of the withheld taxes from your own funds to have to whole distribution amount as a rollover.

Please follow these steps to enter your 1099-R and rollover to an IRA:

1. Open you return in TurboTax 
2. Click on "Search" on the right top and type “1099-R” in the box
3. Click on “Jump to 1099-R”
4. Continue "What did you do with this money from this payer?" and select "I moved the money to another retirement account (or returned it to the same account" then select "I rolled all of this money to an IRA..."
5. On the "How much money did you actually deposit" screen answer "yes, I added $xxxx to $xxxx"
6. Continue answering the questions.

[THE_STEINMANS]

Thanks for the quick response, and time and effort, to help me out.

However, I don't think you totally understand my situation.   My bad explaining the situation.   (I confused myself).    Because the company, closed out our 401 (actually a 403B) because it had less then 5000.00 when my wife left the company, we did not get a 1099-R for it.   We just received a check from them with the federal and state taxes taken out.   So, we gave our financial planner the check to rollover into an IRA, and added a personal check (approx $1000.00) to cover the federal and state taxes to also include in the IRA.    (In effect, rolling over the money ourselves.)   So, all this to say, once again we don't have a 1099-R for it. 

I'm not sure how to treat that as anything other than a IRA contribution.   So I tried that and when I try to enter it that way, it doesn't provide any tax deduction, or credit, because we made over the MAGI amount.   

I feel like I should should somehow be able to get something deduction-wide or credit-wise.   Am I missing something...or am I doing something wrong.  I even updated my Turbo Tax to Premier, from Deluxe, thinking I just needed the more advanced version.   Help!!

Thanks so much!!!

[DanaB27 · Accepted solution]

Please contact the company 401k manager they are required to issue you a 1099-R for the distribution. Please do not enter this as an IRA contribution since the money was rolled over.

If you cannot get the 1099-R then you will have to create a substitute 1099-R but please try to get the 1099-R first. On the "Tell us which 1099-R you have" screen you will need to select "I need to prepare a substitute 1099-R"

For future references, if you make contributions to a traditional IRA and can not deduct the contribution because of your income and retirement plan at work then you will have a basis in the traditional IRA that is tracked on Form 8606. Later when you withdraw money some of that money will be allocated to this basis and will be tax-free.