Reporting required for 401-K to IRA rollover (for both Roth and Traditional)

[poncho_mike]

My employer allows me to contribute to both a before tax 401-K and a company savings plan (after-tax).  I can do in-service distributions from the after-tax savings plan directly into a Roth IRA.    I contribute the maximum to both the before tax and after tax plans the IRS allows.

After allowing these savings to build up for several years, I recently rolled the after tax portion of my savings to a Roth IRA.  When I did that, I was told I also had to roll the earnings off that money over to a pre-tax Rollover IRA.   A Form 5498 was generated for both of those transactions.  I was told that neither transfer would create a taxable event.  

So what do I do with these Form 5498s?  I'm a little confused because the title states 2021 IRA Contribution Informatin.  I also contributed the max to a Roth IRA independent of the company savings plans.

[DanaB27 · Accepted solution]

You do not enter Form 5498s, they are just for your records.

If you got only one Form 1099-R for the transaction you will have to split Form 1099-R into two separate Forms for TurboTax to handle this situation. One for the rollover to the traditional IRA and one for the conversion. As long as the total and distributions codes match entering it like this will not cause a problem.

1. Click on "Search" on the top right and type “1099-R” 
2. Click on “Jump to 1099-R”
3. Enter the first 1099-R for the rollover into the traditional IRA:
   1. Box 1 Enter amount send to traditional IRA
   2. Box 2b check
   3. Box 5 blank
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. Enter a second 1099-R for the conversion to Roth IRA:
   1. Box 1 Enter amount send to Roth IRA
   2. Box 2b check
   3. Box 5 enter amount listed on Form 1099-R
7. On the "Did you move this money from a 401(k) to a Roth 401(k)?" screen answer "No"
8. On the "Did you move the money to a Roth IRA?" screen answer "Yes"

To enter you Roth IRA contribution (outside of a work retirement plan):

1. Click on "Search" on the top right and type “IRA contributions” 
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”

[poncho_mike]

@DanaB27 

My 401-K and after-tax savings plan were both at Fidelity.  I moved the after-tax savings to a Roth IRA and the earnings to a pre-tax IRA at Fidelity.  I checked my tax forms, and I don't have a 1099-R, only the Form 5498s.  That is why I am confused.  

Since the rollover never left Fidelity, should a 1099-R have been generated?

[DanaB27]

You should double-check with Fidelity to see if they issue a 1099-R.

Please see How do I file an IRS extension (Form 4868) if needed.

@poncho_mike

[Edited 4/19/2022 | 9:00pm PST]

[dmertz]

A distribution from a 401(k) is always reportable on a Form 1099-R.  If this transaction occurred in 2021, Fidelity issued a 2021 Form 1099-R reporting this distribution, so contact them to obtain the missing form.

The Form 1099-R will have the total distributed.  To accommodate TurboTax's limitations, you'll need to split the Form 1099-R into two, one for the portion rolled over to the traditional IRA and that other for the portion rolled over to the Roth IRA.