Roth IRA Distribution and partial Repayment

[GoofyMan]

Hi,
I took a sum of $120,000 from My Roth IRA for a house (in 2024).

Within 30 days I returned back $20,000 since I didn't need all the amount.

I am over 59 1/2 so the distribution is tax free.

I received Form 1099-R from Vanguard showing the $120,000 that I took.

However, I didn't receive anything from them regarding the 20K I gave back. When I called Vanguard they said the 20K will show on Form 5498 that I will get in May.

I will file my tax return in February. Before I receive the 5498.

How will I report the $20,000 that I gave back without a supporting Form?

I called Vanguard and they said either from 5329 or 1040 as Indirect Rollover.  But they seemed not sure and I am afraid to make a mistake.

Will TurboTax have an adequate mechanism for me to report both transaction (withdrawal and back) when for one of them I don't have a Form?
Thanks!

[KeshaH]

You will need to enter this into TurboTax as an indirect rollover. 

After entering your 1099-R and answering a few questions, you will come to a screen that says Tell us if you moved the money through a rollover or conversion.

Choose I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days) and click Continue

Choose No, I rolled over less than $120,000. Enter the amount that was put back into the account and click Continue.

TurboTax will then ask you additional questions to determine whether you'll need to include any of the remaining distribution in income or pay an early withdrawal penalty.

[GoofyMan]

Thanks Kesha,
I plan to work on my taxes in February and will try to follow your directions. 

[GoofyMan]

Hi Kesha,
Are you sure your instructions are identical to the 2024 turbo tax Deluxe version?

I don't see the "I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days) " option.

This is what I have:
- I imported the 1099-R from Vanguard (the system updated all the fields automatically)

- I then got the screen:

Great news, we got your 1099-R info!

Confirm that the type of form 1099-R matches your copy of the form. 

And I chose the option:

Form 1099-R, withdrawal money from 401, IRA, etc.

- I hit Continue, and Continue again on the next screen (showing me all imported fields including $120,000 in box 1 (Gross distribution)

- Next was the screen: Where is this distribution from?

Armed forces

Bailey

Railroad

None of the above

I chose None of the above and hit Continue

- Did you inherit the IRA

No

Continue

- What did you do with the money from Vanguard Fiduciary Trust?

I rolled over all the money

I rolled over part of the money to another account

I chose "I rolled over part of the money to another account"

Under it there was a question:

Tell us how much of the $120,000 you moved to an IRA , 401K or other retirement account

I typed $20,000 in the box next to: amount rolled over to another (or to the same) retirement account

Then, when I go back to the home page of Turbo tax, under "Wages and Income", at the section "Retirement Plans and Social Security", I see $120,000 next to "IRA, 401k,  Pension Plan... Withdrawals".

My question is: Shouldn't I see there $100,000 instead of $120,000?

Thanks!

[VolvoGirl]

Looks like you got all the questions about rolling it over.

If you are looking at a summary screen or review screen those show all the full amounts as income and lump a lot of stuff together. You need to check the actual 1040 line 4b and make sure it's right.

[GoofyMan]

Thanks.

Unfortunately, my line 4B says $0.

Also, there is two 4B: on the left side and the right side of the form

Left side:

- 4A IRA distribution: 120,000

    b Taxable amount: Rollover

Right side:

2b: xxx

3b: xxx

4b: 0.

Which 4b are we talking about? and regardless (no one of them is showing the $20,000).

Thanks!

So something I am doing wrong?

[VolvoGirl]

Oh yeah it was from a Roth so 4b should be zero.  Don’t think the 20,000 put back will show up anywhere on your tax return.  @dmertz 

[GoofyMan]

So in a way, my tax return is wrong?
there is no form that will show that I actually withdrew only $100,000.  The only place that shows a withdrawal shows the incorrect amount, the original $120,000?

There are no tax implications since I am over 59 1/2, but just am a bit confused how come the reporting is not accurate.

Thanks!

[dmertz]

Then, when I go back to the home page of Turbo tax, under "Wages and Income", at the section "Retirement Plans and Social Security", I see $120,000 next to "IRA, 401k,  Pension Plan... Withdrawals".

My question is: Shouldn't I see there $100,000 instead of $120,000?

$120,000 is correct.  The amount reported here is intended to show the gross amount taken out.  What you did with the distributions has nothing to do with what is in this total.  This total is only to give an indication that you entered all of the Forms 1099-R that you intended.

Your Form 1040 lines 4a and 4b are also correct, including the ROLLOVER notation.