I have an aftertax 401K with my employer, and I convert those funds into a Roth IRA. Every year I receive a 1099R for this conversion. My 1099R states the amount that was converted in box 1 and a taxable amount in box 2a. It also lists my basis in box 5 and in box 7 code G. When calculating my taxable income, turbotax adds the amount in box 2a to the difference between box 1 and box 5. This effectively doubles my taxable income which I believe to be in error. I was hoping someone might have a solution to this dilemma?
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Did you check the IRA box mistakenly?
TurboTax has specific questions about the scenario you describe with a 401k.
The tax would be on the taxable amount on your 1099-R.
Code G is a direct transfer and not taxable. If you are looking at a summary screen or review screen those show the full amount as income and lump a lot of stuff together. You need to check the actual 1040 form and make sure it's right. @dmertz
Make sure that you have not mistakenly marked the IRA/SEP/SIMPLE box on TurboTax's 1099-R form. Make sure that you have not entered this Form 1099-R twice. Check Form 1040 to see that only the box 2a taxable amount is included on line 5b. The entire box 1 amount will be included on line 5a.
I believe you are correct and the form was completely incorrectly by the retirement benefits firm. IRA/SEP/Simple is not checked on the 1099 or when entered into Turbotax. I believe line 5 of the 1099R should be my basis or after tax contributions to the 401K, line 1 should show the full amount transferred, and line 2A should be $0. This was the way my form appeared in prior years.
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