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Screwed up retirement distribution


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Here's the 1099-R info:  box 1 total distribution: $6515, taxable amount: $6515, fed w/h: $1303, state tax w/h: $130. Code G.

heres what happened: client rolled 401(k) into Roth. I've explained that since the withholding didn't get rolled, there will be a penalty. 

I can't figure out how to get this I to ATX without overrides. When I entered at the bottom of the 1099-R tab that $5083 was rolled into a Roth, that amount went to line 15 of the 1040 in addition to the $6515 already showing as taxable on line 16.  There should be a 5329 and penalty calculated on the withholding. Nada. 

Now maybe it's because I'm fried and suffering from allergies to the max & have had a splitting headache all day and another new client partnership can't understand why basis and balance sheets and bank reconciliations are important, but I can't figure out how enter this without overrides. Help please!

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I gave this a shot.  On the 1099R form I omitted the taxable amount on line 2a because you know it isn't correct.  That put 5083 from the bottom of the form for the amount converted onto 15b with 6515 on 16a.  On 5329 on the input I have on line 4 (Other early distributions not code 1,5 or S).  On line 2 I put Other, code 12, and 5083.  This created the amount subject to tax of 1432 and tax of 143. 

I think the documents would support this and don't know if you need to add an explanation for code 12. We'll see what others would do but I think this would work.

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I was just posting what Abby did. All the employee did was bypass the step of rolling into a trad IRA first. If it had gone from the 401K to trad IRA and then converted to Roth, the TP would be paying on that conversion.

From pub 590A -

Income. You must include in your gross income distributions from a qualified retirement plan that you would have had to include in income if you had not rolled them over into a Roth IRA. You do not include in gross income any part of a distribution from a qualified retirement plan that is a return of basis (after-tax contributions) to the plan that were taxable to you when paid. These amounts are normally included in income on your return for the year of the rollover from the qualified employer plan to a Roth IRA

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Yeah - moving it is a taxable event regardless of whether they rolled 100%.

I believe the early withdrawal penalty would still be applicable on the portion not rolled over.

I seriously doubt they would withhold that much tax on a 401k ROTH withdrawal.

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