I did a rollover from my pension to a Roth IRA but forgot to take taxes out

[RalphH1]

You’re not missing anything with your description, but it sounds like something is telling the TurboTax program that both 1099s are fully taxable. The questions you see after entering the numbers box-for-box from the actual forms should be clarifying the situation, so I recommend revisiting them and making sure they’re answered accurately.

It looks like you’re on top of this already, LilyCat, but the rollover of pension funds to an IRA is generally non-taxable, and the conversion to Roth (unless there were any “post-tax” amounts) is taxable. And the same funds wouldn’t be taxed twice (on the same tax return, with no deduction in-between. But again, the program should be asking the questions needed (for correct tax treatment) — feel free to post here about any which you’re not sure about…

[dkoskamp]

"Once I added the second 1099-R from my last company that paid out my pension instead of just listing the brokerage 1099-R the amount I owed in taxes went up substantially."

Make sure when you enter this pension 1099R in that during the interview-like questions you answer "No" when it asked if you rolled or converted this to a Roth IRA (I forget which wording it uses regarding the Roth).   The pension company 1099R is simply the distribution from them to the traditional IRA institution and that distribution transaction is not taxable(it is not the transaction where the money is taxable). This is where I previously caused myself problems and made Turbotax think the money was taxable when it was not.

The other 1099R where the money was actually converted from a traditional IRA to a Roth IRA is where the money becomes taxable.  Do make sure you see that taxable amount in 1040 preview line 4b, but not in 5b after you enter the two 1099R forms.

[dkoskamp]

Sorry, before doing what I said confirm this is the case for your pension company 1099R:

"the pension was a direct rollover to the IRA it should have a code G in Box 7 or the 1099-R. "

I was able to enter the 1099R the way I did because code G was marked indicating the pension money was not paid directly to me.

[LilyCat]

The question that showed up were asking if I rolled this money over to a Roth IRA. This money is the money on the 1099-R that I received from the company that paid me the pension money. Do I just say no to this question? Otherwise as mentioned earlier, it will increase my income to beyond what I received last year. I eventually did roll the money over into a Roth but that was after it was moved to traditional IRA. My 1099-R from my brokerage account is already counting that roll over to Roth IRA. 

[LilyCat]

I just saw @dkoskamp's response. Thank you! What you said makes sense. Can one of the TurboTax experts @RalphH1 confirm?

[DaveF1006]

You should receive 2 1099R's. The first 1099R should have a code G and no taxable amount reported if this was a direct rollover to a Traditional IRA plan. Here you will answer no to the question if this was rolled over to a Roth plan.

Now you should have received a second 1099R that reported the rollover to the Roth.  This should should have an amount in Box 2A and reported as taxable income. Here you will answer yes to the question that this was a rollover into a Roth plan. This is taxable income because it transfer money from a pre-taxed plan into an after-taxed contribution plan.

Let us know if this answers your question and confirms what dkoscamp mentioned. i assume your closing line in your post represents the second 1099R you received.

[LilyCat]

The first 1099 from my company that paid out my pension does show a taxable amount the same amount as my brokerage account 1099 is showing as taxable. I had told that company that paid out my pension I would put it in a Roth IRA and they wrote it as a check to me. However, when I took the check to my brokerage account, they said they couldn't directly put it in a Roth IRA. It had to go into traditional IRA first and then Roth IRA. I think that's why they both show as taxable amounts. Should I still follow the same steps you mentioned?

[DanaB27]

Yes, you will Tax Expert DaveF1006 steps to enter a rollover for the pension that was rolled over to the traditional IRA (nontaxable) and the conversion from traditional IRA to Roth IRA (taxable).

Please review the steps below.

To enter the pension rollover to a traditional IRA:

1. Click on "Search" on the top right and type “1099-R”  
2. Click on “Jump to 1099-R”
3. Click "Continue" and enter the information from your 1099-R from the pension
4. On the "Did you move this money from a 401(k) to a Roth 401(k)?" screen answer "No"
5. On the "Did you move the money to a Roth IRA?" screen answer "No"
6. Continue through the questions.

To enter the conversion to Roth IRA:

1. On the "Review your 1099-R info" screen click on "Add another 1099-R"
2. Enter the Form 1099-R for the Roth conversion
3. Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA”

@LilyCat 

[dkoskamp]

By the way, was this the code marked on your pension company 1099R, or what code was there if not G?

"the pension was a direct rollover to the IRA it should have a code G in Box 7 on the 1099-R. "