ROTH IRA Contribution Limit Worksheet

[Kesumpee]

I don't think TT is calculating the MAGI on line 1 of this worksheet correctly.

The MAGI (for Roth contribution purposes) should subtract both IRA to Roth Conversions and 401(k) to Roth Conversions from the AGI. I had substantial Roth conversions in 2025 that should have reduced my Roth MAGI below the $246k joint threshold.  These Roth Conversions show up on line 4b and line 5b on Form 1040. However, the MAGI on line 1 of the ROTH IRA Contribution Limit Worksheet only reduces the AGI by the amount of the IRA conversion. It does not seem to subtract the 401(k) conversion that increases my AGI on Form 1040 line 5b.

Thanks for your help on this.

[AnnetteB6]

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[Kesumpee]

Your token number is: 163540865-00757733

I believe the issue is TT's incorrect handling when using distribution code "G" in box 7 of the 1099-R

[Kesumpee]

Hi Annette,

After looking into this issue further, I was able to determine that TT is not correctly handling 1099-R's with the IRA/SEP/SIMPLE box unchecked (ie, 1099-R's from 401(k) Pension distributions). These amounts show up correctly on line 5a of the Form 1040, but the amount showing up on line 5b (the taxable amount) is showing a larger amount than the amount on 5a. That has to be an error, as line 5b must be less than or equal to line 5a. I think this error is directly linked to my original post of the ROTH IRA Contribution Limit Worksheet error.

Also, when I go thru the "Easy Step" process to edit this 1099-R, there are 2 questions that always lose my original response; "Did you move this money from a 401(k) to a Roth 401(k)?" (no) and "Did you move the money to a Roth IRA?" (yes).

Hope this helps.

[dmertz]

I agree that Form 1040 line 5b must be less than the amount on line 5a, so something is messed up.  Have you tried deleting and reentering the Form 1099-R?

For a code-G Form 1099-R reporting the rollover of the entire gross amount from a 401(k) to a Roth IRA, box 1 should show the total gross amount, box 5 should show any after-tax basis and box 2a should should show the difference between box 1 and box 5.

[VolvoGirl]

@dmertz   I believe the "a" line can be less than "b".    If one of the 1099R forms has the same Gross and Taxable amount then it won't show up on 5a.

See IRS 1040 Instructions.
https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

For line 5 page 28 first paragraph middle column……
If your pension or annuity is fully taxable, enter the total pension or annuity payments (from Form(s) 1099-R, box 1) on line 5b; don’t make an entry on line 5a.

[Kesumpee]

I did delete the 1099-R and re-entered to no avail.

On this 1099-R (from Empower), my box 2a is a lot less than the difference box 1 and box 5.

There is an amount on TT Form 1099R Summary, line 31 that I cannot find the source of. This amount is being added to line 26 of this form and the total is showing up on 1040 line 5b, far exceeding the amount on line 5a.

[Kesumpee]

This case doesn't apply to my return as my Gross and Taxable amounts are different.

[dmertz]

"For line 5 page 28 first paragraph middle column……"

@VolvoGirl , there is certainly ambiguity in the IRS instructions for lines 4a/4b and 5a/5b.  There always has been.  I believe that "don't make an entry on line 5a" would only apply if all distributions being reported were entirely taxable on line 5b.  Once you have an need to make an entry on line 5a for a distribution that is not fully taxable, I believe that one must include all gross amounts on line 5a.  "Don't make an entry on line 5a" is is not the same as "don't include the amount on line 5a."  "Don't make an entry on line 5a" implies leaving line 5a blank, which cannot be done if some distributions are only partially taxable.  The similar case of lines 4a and 4b has an instruction to include all amounts on line 4a if multiple distributions are reportable on lines 4a/4b.

The IRS instructions should have been written to simply require the gross amounts of all distributions to be included on either line 4a or 5a, eliminating convoluted instructions regarding when and when not to populate those lines.

As to how TurboTax developers interpreted the instructions, it's entirely possible that they chose to omit from line 5a any amounts that come from distributions that are fully taxable, but that makes whatever is shown on line 5a rather less useful since one cannot use it in conjunction with the amount on line 5b to determine the nontaxable amount being reported on the tax return.

[Kesumpee]

@AnnetteB6 @dmertz 

Digging a bit deeper, it appears to me that TT is double counting the taxable distribution from my 401(k).

My 1099-R from Empower has an amount in Box 5 that when subtracted from Box 1, shows up in the TT 1099R Summary Line 31. But this 1099-R also has an amount in Box 2a, which also shows up in the TT 1099R Summary Line 26. These two amounts are summed and then show up on the 1040 Line 5b, effectively double counting the taxable amount shown on the 1099-R. The only number that should wind up on the 1040 Line 5b should be from my 1099-R Box 2a, the taxable amount calculated by Empower.