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03-07-2018 09:35 AM
Last year I rolled over a 401K from a former company into the 401K of the company I currently was working for this was all handled smoothly I received the 1099R for that transaction. Later I retired and decided to roll my 401K into an IRA that also went smoothly and I have a 1099R for that transaction. The problem or question I have is this when you list the 1099R's for these transactions on the Tax form it adds them together giving a total that does not exist. example: Company A 401K had 120.00 in it Company B had 80.00 in it together that comes to 200.00. when you put these totals in the tax form it adds them together giving you 320.00. The tax form does not separate what was rolled into the 401K and then what was rolled into the IRA. The IRA account should be 200.00 not 320.00.
Hope someone can help with how I can get the tax form to reflect this.
03-07-2018 09:45 AM
Hello, it sounds like it is actually being handled correctly if no amounts are being shown as taxable.
Company A issues their 1099R based on the total distribution, so 120 in your example. Company B when they have a total distribution to the IRA would then be 200 (120A +80B) since that is the amount of money that left the account. So your amounts distributed from the 2 accounts is 320. As long as these were rollover transactions, nothing should be showing as taxable income, the 5498 you receive from the IRA should reflect the 200 that was actually placed there. As long as these were direct rollovers there should not be an issue.
03-07-2018 09:50 AM
Thanks for answering but I still would like to know why the program adds the two together making an amount that does not or never did exist. One amount (120.00) is for the rolled over 401 the other the combined 401K (200.00) rolled into the IRA not a total rollover of 320.00.
03-25-2018 08:32 PM
It's because the numbers on the 1099-R forms are showing distributions from the different accounts, not the ending value, or the value of the accounts at any time.
Like CalebB explained, you had the first distributions from the original 401k= $120. That amount was rolled over into the second 401k giving a value in the second 401k of $200 ($120 rolled over + $80 already there). The distribution from that account was $200 that was rolled over into the IRA, which, yes, will have a value of $200.
The number being reported on your tax return is NOT the value of the accounts, it's the total distributions from your retirement accounts during the year-- $120 the first time + $200 the second time = $320. It takes into consideration what was rolled over when it calculates the taxable amount. (If it was all rolled over, the full $320 would be subtracted from the total distribution to get a taxable value of 0.) If you received 5498 forms showing the receipt of this money into the accounts they were rolled over into, they'd also total $320, because the second 401k received $120 and the IRA received $200. Does that mean that the IRA is valued at $320? NO, but it does mean that different accounts received amounts totaling $320 during the year.
The number on your tax form isn't and shouldn't be the value in the account. That's not what it's supposed to report. It's reporting the distributions.
04-20-2018 09:57 PM
I believe early distributions from a 403(b) account are treated the same way as early distributions from an IRA. Whatever you take out will be taxed at your regular income tax rate + a 10% early withdrawal penalty.