Hello,
I got a 1099-R and now as I am completing my taxes, Turbo Tax is showing me that the rollover is considered income. Can you you help me understand why this is the case? See screenshots
This one is from the 1099-R.
Rollovers to a Roth IRA of distributions that are not made from a designated Roth account. If an eligible rollover distribution from an eligible employer plan is rolled over to a Roth IRA and the distribution is not made from a designated Roth account, then the amount that would be includible in gross income were it not part of a qualified rollover contribution is included in the distributee’s gross income for the year of the distribution. For this purpose, the amount included in gross income is equal to the amount rolled over, reduced by the amount of any after-tax contributions that are included in the amount rolled over, in the same manner as if the distribution had been rolled over to a non-Roth IRA that was the participant’s only non-Roth IRA and that non-Roth IRA had then been immediately converted to a Roth IRA. Thus, the special rules relating to net unrealized appreciation at § 402(e)(4) and certain optional methods for calculating tax available to participants born on or before January 1, 1936 are not applicable.
Did you rollover the 401(k) to a Roth 401(k) or a 403(b) account or a Roth IRA account?
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.
If you rolled it over it should say Rollover to the left of the taxable amount on 4b or 5b.
For Online, You can preview the 1040 or print the whole return
Duplicate question:
I spoke to the plan administrator and they confirmed that it was not rollover to a ROTH 401k, but to a regular 401K (pretax).
Hi VolvoGirl,
Yes, i did see the form and it does show ROLLOVER and in line 5B is 0. Does this mean is correct? How come Turbo Tax considers it as income though? I think this is the part that is confusing to me.
It's not income. Line 5b is zero. Zero dollars are being added to your income.
Hello ColeenD3,
Yes I see that on the tax form, but what makes it confusing is that Turbo Tax, in the summary page includes as income and the Total Income it shows there is the w2 income plus the rollover. This is the part that has been confusing me though. But even from what you are saying I should be ok then?