I rolled over an old 401k with Fidelity to a traditional IRA at a new bank. Then, I converted my traditional IRA to a Roth IRA at this same new bank, and I received a 1099R for the rollover (distribution code G) from Fidelity and the conversion (distribution code 2) from my new bank.
I am unsure about how to enter this information into TurboTax, as my income seems to double count the gross income from the rollover and from the conversion. As I understand it, I should only have to pay taxes on the Roth IRA conversion. I have entered each 1099R separately.
Rollover:
box 1 (Gross Distribution): $AMOUNT
box 2a (taxable amount): $0
box 2b: total distribution
box 7: distribution code G, IRA/SEP/SIMPLE is unchecked
Conversion:
box 1 (Gross Distribution): $AMOUNT
box 2a (taxable amount): $AMOUNT
box 2b: taxable amount not determined
box 7 (distribution code): 2, IRA/SEP/SIMPLE is checked
When I enter my rollover 1099R, I select "No" when asked if I rolled over my money into a Roth IRA. When I enter my conversion 1099R, I say that "I converted over some or all of it into a Roth IRA" when asked. My new bank says I should only have to account for $AMOUNT when filing, and should not have 2x$AMOUNT as shown on my income. TurboTax seems to have difficulty with the split rollover/conversion process. How can I ensure I file correctly and dont overpay?
If you are looking at a summary screen or review screen those show the full amount as income and lump a lot of stuff together. You need to check the actual 1040 and make sure it’s right. For 1099R check 1040 line 4a/5a and 4b/5b for any taxable amount. If it was a rollover it should say ROLLOVER by the “b” line and 0 taxable.