1099-R Rollover from 401K to Roth $401K

[chapinreyes]

Hello,

I rollover a 401K from a previous company company to current employer.  I learned that I went from a 401K to a Roth 401K.  However, Turbo tax gave me a picture of my income after entering all income and one of the line items is pensions - nontaxable, but over the left under the 2021 column it shows total amount of the rollover and it showing as income for 2021.  Why is this - see screenshot?  Why is a rollover considered income in this case?

[FangxiaL]

If it is a rollover from a pre-tax regular 401(k) account to an after-tax Roth 401(k) account, the rollover should be taxable because you are converting the pre-tax contributions to an after-tax retirement account. 

[chapinreyes]

Hello FangxiaL,

How can I check on this?  Because I thought I was rolling over from my previous 401K (pre-tax) to a Roth IRA (pre-tax)?  Are there section on the 1099-R i can confirm this?    Also, somehow it is considering it as income?  How come since it was a rollover?  See screenshot.

It is interesting that the rollover shows here as income in a turbo tax summary page as well.

[Rainman12]

There's no such thing as a pre-tax Roth. You did a Conversion, not a Rollover.

[macuser_22]

First you said Roth 401(k), now you say Roth IRA.   Either way Roth accounts are always after tax so when you change from a pre-tax 401(k) to an after-tax Roth, you must pay the tax on it.   Unless the 401(k contained after-tax contributions which would be shown in box 5 on your 1099-R for the 401(k) distribution.   Assuming you 2099-R had a code G in box7 then the interview will ask if you had after-tax contributions where you enter the box 5 amount if any.

[dmertz]

Since the rollover was to the plan of a different employer, I suspect that the rollover was to another 401(k).  Hopefully this rollover was a nontaxable rollover to the traditional account in the new employer's plan because a rollover from the traditional account in one employer's 401(k) plan to the designated Roth account in another employer's 401(k) plan is not permitted.  A rollover from a traditional 401(k)  account to a designated Roth account in a 401(k) is only permitted to be done in-plan.

Check with your new employer's plan to make sure that the rollover was deposited into the traditional account.  Perhaps only your new contributions are going into the designated Roth account.

[chapinreyes]

Hello dmertz,

I have confirmed with the plan administrator that this was rollover to the traditional 401K and confirmed it is not a taxable event.  However Turbo Tax still thinks that is income to me?  How come? see screenshots

[dmertz]

If the Form 1099-R has code G, make sure that the payer reported in box 2a that $0 is taxable.

I would delete this1099-R and reenter it, making sure to indicate that it was not rolled over to any kind of Roth account.

[chapinreyes]

Hello dmertz,

Ok let me try that and will update.  This is getting very confusing.  First how do I go about removing this form so I can re-enter it? Do I do it from the forms or from the easy menu?

*** Here i entered all the info as it appears on the 1099R

Then after a few menu options, i got to this page: and I have tried answering both YES and NO and they both still show as income in the summary later..

Then this question follows:

Then it finally shows my total income to be income + rollover

[dmertz]

It's nontaxable income.  Nontaxable income has no effect on any of the calculations on your tax return.

[chapinreyes]

Ok let me re move the form to make sure I do it properly.  How do I go about removing the form?

[chapinreyes]

Hello, 

OK let me just delete the form and start it again.  Since the plan administrator confirmed with me that it did not rolled over to a ROTH 401K but the a pretax 401 then i just want to confirm the following two questions I need to answer as follows:

### so here the answer is NO correct because it did not go to a ROTH401K and did not go to a 403B, correct?

Then the answer on this one should NO as well correct since 100% was rollover to the pretax 401k?

[macuser_22]

That is correct.   No to both, the default is a Traditional before tax account.

The 1040 should have the amonnt on line 5a and 5b (taxable amount) zero with the word ROLLOVER next to it.

[chapinreyes]

Hello macuser_22

Thank you for your response!  So the only thing that remains is how to do cleanly remove this form so I can start over again?  Thank you!

[macuser_22]

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@chapinreyes wrote:

Hello macuser_22

Thank you for your response!  So the only thing that remains is how to do cleanly remove this form so I can start over again?  Thank you!

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https://ttlc.intuit.com/community/accessing/help/how-do-i-view-and-delete-forms-in-turbotax-online/0...

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https://ttlc.intuit.com/community/forms/help/how-do-i-delete-a-tax-form-in-the-turbotax-cd-download-...