How to imput 1099-R where distributions went to 3 different types of accounts?

[Kelly-Boo]

My employer has a type of 401K plan called "Voluntary After Tax Contribution" which we can elect to put in after tax dollars up to $15,645/year.  I have been contributing for years but at some point a few years ago, they allowed quarterly conversions of this money to a Roth 401K (earnings taxable).

Since I had contributions in the account for many years (nontaxable contribution bucket) and many years of earnings (taxable amount), a financial advisor for our company advised me to move the contributions (nontaxable) to a Roth IRA.  The earnings (taxable) was then moved into a Rollover IRA then moved back into my 401K plan.  Thirdly - for tax year 2019 - I continued to make my regular contributions and quarterly - they would convert to a Roth 401K.  

I received only ONE 1099-R for all the money that I just described above.  The money was moved into three different types of accounts (Roth IRA), (Rollover back to my 401K), (Roth 401K).  In TurboTax -when I entered this 1099R - it asks "Is this 1099-R" reporting a rollover of funds from a 401K plan to a designated Roth 401K plan? (Y or N).  Well the answer is SOME of the money was moved into Roth 401K plan so how do I deal with this situation?

Someone said to break up the amounts but do the distribution codes stay the same and the check boxes stay the same?  So confused. Any help by the community would be very much appreciated it!!  Thank you in advance.

[macuser_22]

Assuming that the 1099-R has a code G in box 7, box 2a zero and box 5 with the after-tax amount rolled into the Roth IRA.

If not then ignore the rest and post what is in box 2a, box 7 and box 5.

TurboTax does not directly support a single 1099-R going to two different destinations.

What you must do is split the 1099-R into two 1099-Rs.

For the amount rolled to the Traditional IRA.

1) In box 1 use the original 1099-R box 1 minus the box 5 amount.

2) Box 2a = 0.

3) Box 5 = blank.

4) Box 7 = G.

5) Answer NO to the two interview questions that ask about a Roth - the default is a Traditional IRA.

For the amount rolled to the Roth IRA.

1) In box 1 enter the original box 5 amount.

2) Box 2a - 0.

3) Box 5 = original box 5 amount.

4) Box 7 = G.

5) Answer NO to the first interview question about a 401(k) Roth and YES to the rollover to a Roth IRA.

That should properly report the 1099-R. The box totals of the two 1099-R should equal the amounts on the original 1099-R.

Nothing about splitting into two 1099-R's go on a tax return - the IRS only gets the dollar amounts on the 1040 form.

[macuser_22]

I don't understand the last part of your question.   After the money was rolled from your employer to  IRA's, then any rollover from the IRA to a 401(k) would be reported on a 1099-R issued by the IRA custodian.  You can only roll before tax money from a Traditional IRA into a 401(k) plan.

Did you roll the IRA to a different employer?   I can see not reason why you would roll a 401(k) to an IRA and then roll it back to a 401(k) with the same employer or why the employer would even allow that.

[Kelly-Boo]

Hi Macuser_22

Thank you so much for your thoughtful reply.  My 1099-R does have code G in box 7- Box 2a however has an amount (explained below) and Box 5 with the after tax amount most of which rolled into Roth IRA but some went to Roth 401K.

I will go through with detail your recs when I re-enter the 1099-R again but I don't think you have all the info correct (I may not be explaining it well as I am not well versed with this kind of stuff).

Basically for years my employer allowed for me to contribute after tax dollars (nontaxable)  into the "Voluntary after tax account" in my 401K. That money over years grew due to earnings (taxable).  At some point a few years ago - something in the tax code changed and we were allowed to convert the after tax dollars to Roth 401K quarterly.  I did not realize this until 2019 but if I moved all the money currently in there to Roth 401K - I would have to pay a hefty tax on the earnings since the earnings were significant since I had the account for so many years.

So the company plan advisor told me this method where I could basically move my entire balance out - contributions (nontaxable) to Roth IRA (no longer in my employer plan) and the earnings (taxable) to Rollover IRA (is this what you are calling traditional IRA?) which then rolled back into my 401K account (I did receive a 2nd 1099-R for the rollover back to my 401K plan).  I did this the first week of January 2019.

NOW - my Voluntary after tax account is "Zeroed" - So moving forward in 2019 - Everytime I got a paycheck - I would now have a contribution balance again (nontaxable) and QUARTERLY - this money would be converted to Roth 401K (not Roth IRA, not Traditional IRA).  I had small earnings over the quarter which are taxable. (So I DO have a small amount in Box 2a which represents this small taxable amount).  My box 5 basically listed all my after tax contribution - a big chunk of which went to the Roth IRA (outside of my 401k) and the rest went to Roth 401k (the quarterly conversions that I did after the "zeroed" balance).

I hope this makes sense - Would you then tell me how you would enter this into Turbo tax?  Sounds like I still need to split out 1099-R and enter it as three different buckets.  Thank you for your kind consideration of my issue.  Kelly

[macuser_22 · Accepted solution]

OK - think I got it now.   In that case you will need to break this into 3 1099-R's.  I hope this is not too confusing.

The 1st, the amount rolled into the Traditional IRA (which is the same as a rollover IRA) would be almost the same as the 1st 1099-R above except the  step 1) In box 1 use the original 1099-R box 1 minus the box 5 amount AND MINUS THE BOX 2a AMOUNT.  That is because the 2a taxable amount included in box 1 cannot be rolled into the Traditional IRA but will be accounted for later.

The 2nd 1099-R would be the same as the 2nd 1099-R above except the amounts in box 1 and box 5 would be adjusted for only the amount of box 5 and 1 that were rolled to the Roth IRA.

The 3rd 1099-R would have the remainder of box 5 that was rolled/converted to the In Plan 401(k) Roth in box 1  and box 5 and the taxable amount in box 2a.   Also any entries in box 10 & 11 should be on this 1099-R.  (Also add the box 2a amount to box 1 that was subtracted from the Traditional IRA rollover above)

You would answer YES to the first interview question about a 401(k) Roth and NO to the rollover to a Roth IRA.

The totals of the 3 1099-R's box 1's should equal the box 1 on the original 1099-R and the same for box 5.

Since there were 3 different destinations there must be 3 1099-R's to report this in TurboTax.

This should match with what actually happened.