Step 1: Gather Your Essential Documents
Before you even log into TurboTax, the absolute first thing you need to do is gather your paperwork. This is the cornerstone of accurate tax reporting.
What You'll Need:
Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.: This is the most important document for an IRA rollover. You should receive this form from the financial institution that distributed the funds from your old account.
Pay close attention to:
Box 1 (Gross Distribution): This shows the total amount of money distributed.
Box 2a (Taxable Amount): For a proper rollover, this should ideally be $0 or blank. If it has a value, don't panic yet, but be prepared to explain the rollover fully.
Box 2b (Taxable amount not determined/Total distribution): Often marked.
Box 7 (Distribution Code): This is critical. Common codes for rollovers include 'G' (Direct rollover and direct transfer of a tax-deferred annuity) or 'H' (Direct rollover of a designated Roth account distribution to a Roth IRA). If you did an indirect rollover (where the money came to you first), you might see other codes like '1' or '7', but you still have 60 days to roll it over to avoid tax.
Form 5498, IRA Contribution Information: You will typically receive this form from the financial institution receiving the rollover funds. This form confirms that the funds were deposited into your new IRA. While you don't enter this form directly into TurboTax, it serves as your proof and backup that the rollover was completed.
QuickTip: Stop scrolling fast, start reading slow.
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| How To Enter Ira Rollover In Turbotax |
Step 2: Log In to TurboTax and Navigate to Income Section
With your documents in hand, it's time to open up TurboTax.
Log In: Go to the TurboTax website or open your desktop software and log into your account.
Continue Your Return: Select "Continue your return" or "Take me to my return."
Find the Income Section:
In the left-hand menu, click on "Federal" (or "Federal Taxes").
Then, select "Wages & Income."
Scroll down until you find the section titled "Retirement Plans and Social Security."
Click on "Start" or "Revisit" next to "IRAs, 401(k), Pension Plan Withdrawals (1099-R)."
TurboTax is designed to guide you, so don't worry if the exact wording varies slightly between versions or years. The key is to get to the 1099-R input section.
Step 3: Entering Your Form 1099-R Information
QuickTip: The more attention, the more retention.
This is where you'll input the details from the 1099-R you received. TurboTax will then ask a series of questions to determine how to treat the distribution.
Choose Your Entry Method: TurboTax may offer to import your 1099-R electronically from your financial institution. If available and you trust the connection, this can be a convenient option. Otherwise, select "Type it myself" or "Enter it manually."
Who is this 1099-R for? If you're filing a joint return, TurboTax will ask if the 1099-R belongs to you or your spouse. Select the correct individual.
Enter Payer Details:
Enter the payer's name (from Box 1 on your 1099-R) and their Employer Identification Number (EIN).
Input Box Values: Now, carefully enter the numbers exactly as they appear on your 1099-R into the corresponding boxes in TurboTax:
Box 1: Gross Distribution: Enter the total amount distributed. Even if it was a rollover, the gross amount is reported here.
Box 2a: Taxable Amount: If your 1099-R shows $0 and "ROLLOVER" or "NONTAXABLE" in Box 2b, enter 0. If there's an actual number here, enter it. TurboTax will use your answers to subsequent questions to adjust the taxable amount.
Box 2b: Taxable amount not determined / Total distribution: Check the appropriate box as it appears on your 1099-R. For a full rollover, "Total distribution" is usually checked.
Box 4: Federal Income Tax Withheld: If any federal income tax was withheld, enter that amount. For direct rollovers, this should typically be $0. For indirect rollovers, 20% is often withheld, which you'll recover when TurboTax correctly identifies it as a non-taxable rollover.
Box 7: Distribution Code(s): This is extremely important. Select the code(s) exactly as they appear in Box 7 of your 1099-R.
For example:
'G' (Direct rollover)
'H' (Direct rollover of a designated Roth account distribution)
'7' (Normal distribution) – If you see this and it was an indirect rollover, you'll rely on your answers to the follow-up questions.
Enter any other boxes (e.g., Box 5, 14, 15, 16) if they have values on your form.
Step 4: Answering the Rollover Questions (The Crucial Part!)
After you've entered the 1099-R details, TurboTax will lead you through a series of questions. Your answers here determine whether the distribution is taxed or not. Pay close attention!
Tip: Pause if your attention drifts.
"What did you do with the money from [Payer Name]?" or similar phrasing.
You will usually be given options like:
"I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days)."
"I converted some or all of it to a Roth IRA." (This is a conversion, not a rollover, and is taxable.)
"I kept all of it." (This would be taxable.)
Select the option that clearly states you rolled over the funds.
"Did you roll over all of this (Box 1) to another retirement account?"
If you rolled over the entire amount from Box 1 to a new IRA, select "Yes, I rolled over to an IRA or other retirement account (or returned it to the same account)."
If you only rolled over a portion, select "No, I rolled over part of it." TurboTax will then ask you to enter the amount that was rolled over. The remaining amount may be taxable.
For specific Distribution Codes (e.g., 'G'):
If your Box 7 has code 'G' (Direct Rollover), TurboTax might ask specific questions like:
"Did you move this money from a 401(k) to a Roth 401(k)?" - Answer "No" if it was to a Traditional IRA.
"Did you move the money to a Roth IRA?" - Answer "No" if it was to a Traditional IRA.
If you did roll it to a Roth IRA, that's a Roth conversion, and it's taxable. You'd answer "Yes" to the Roth IRA question, and TurboTax will guide you through the taxation of that conversion.
The goal here is to clearly indicate that the money was moved from one pre-tax retirement account to another pre-tax retirement account (or from Roth to Roth, if applicable), making it a non-taxable event.
Step 5: Review and Verify Your Entry
Once you've gone through all the questions, it's essential to verify that TurboTax has correctly processed the rollover as non-taxable.
Access Your Tax Summary:
In the left menu, go to "Tax Tools."
Select "Tools."
From the pop-up, choose "View Tax Summary."
Preview Your Form 1040:
On the left side of the "Tax Summary" screen, click "Preview my 1040."
Check Key Lines:
Look at Line 5a (Pensions and annuities) and Line 5b (Taxable amount).
For a non-taxable IRA rollover (e.g., Traditional IRA to Traditional IRA):
Line 5a should show the full gross distribution from Box 1 of your 1099-R.
Line 5b should show "$0" and the word "ROLLOVER" next to it.
If Line 5b shows an amount greater than $0, it means TurboTax thinks some or all of your rollover is taxable. Go back and re-check every question you answered about your 1099-R and the rollover. You likely missed or misanswered a crucial question.
Don't proceed with filing until you confirm that your rollover is correctly shown as non-taxable on your Form 1040.
Tip: Reading in chunks improves focus.
Important Considerations for IRA Rollovers
The 60-Day Rule (Indirect Rollovers): If the distribution was paid directly to you, you typically have 60 days from the date you received the funds to deposit them into another eligible retirement account. Failing to do so can make the distribution fully taxable and subject to a 10% early withdrawal penalty if you're under 59½.
One-Rollover-Per-Year Rule (IRA-to-IRA): You are generally allowed only one indirect rollover from an IRA to another IRA (or the same IRA) within any 12-month period. This rule applies to all your IRAs combined. This rule does not apply to direct trustee-to-trustee transfers or rollovers from employer plans (like a 401(k)) to an IRA.
Partial Rollovers: If you only rolled over a portion of the distribution, the part not rolled over will typically be taxable and potentially subject to early withdrawal penalties if you're under 59½. TurboTax will calculate this automatically if you indicate a partial rollover.
Roth Conversions vs. Rollovers: A Roth conversion (moving money from a Traditional IRA/401(k) to a Roth IRA) is not a tax-free rollover. It's a taxable event, and you'll pay income tax on the amount converted (except for any non-deductible contributions). TurboTax will guide you through this process if you indicate a Roth conversion.
Direct vs. Indirect Rollovers:
Direct Rollover: The money goes directly from one financial institution to another without passing through your hands. This is the safest method to avoid any withholding or issues. This will typically have a 'G' code in Box 7.
Indirect Rollover: The money is paid to you (you receive a check or direct deposit), and then you are responsible for depositing it into the new account within 60 days. If taxes were withheld (20% for employer plans), you'll need to make up that difference with other funds to roll over the full amount.
Frequently Asked Questions (FAQs)
Here are 10 common "How to" questions related to entering IRA rollovers in TurboTax, with quick answers:
How to know if my distribution was a rollover?
Check Box 7 of your Form 1099-R. Codes like 'G' or 'H' explicitly indicate a direct rollover. If you received the money directly and redeposited it within 60 days, it's an indirect rollover.
How to handle a 1099-R with Box 2a having a value for a rollover?
Enter the 1099-R exactly as it is. When TurboTax asks about what you did with the money, clearly state that you rolled over the entire amount to an IRA. TurboTax will then typically adjust the taxable amount to zero.
How to report a direct rollover from a 401(k) to a Traditional IRA?
Enter your 1099-R (which should have a 'G' in Box 7). TurboTax will ask if it was moved to a Roth 401(k) or Roth IRA; answer "No" to both. This correctly tells TurboTax it was a non-taxable rollover to a traditional account.
How to enter an indirect IRA rollover if I received a check?
Enter the 1099-R as received. When prompted, select that you "rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days)." Ensure you indicate the full amount was rolled over if that's the case.
How to verify my IRA rollover is not taxable on my tax return?
After entering the 1099-R and answering the rollover questions, go to "Tax Tools" -> "Tools" -> "View Tax Summary" -> "Preview my 1040." Check Line 5b (Pensions and annuities, taxable amount); it should show "$0" with "ROLLOVER" next to it.
How to correct a rollover entry if TurboTax is showing it as taxable?
Go back to the 1099-R section in TurboTax and re-visit the questions asked after you entered the form data. Carefully review each question and ensure you selected the option that indicates a full, non-taxable rollover.
How to report federal tax withheld on a rollover?
Enter the amount from Box 4 of your 1099-R into TurboTax's Box 4. If the rollover is correctly identified as non-taxable, this withheld amount will be added to your refund or reduce your tax liability, as it was overpayment.
How to handle a rollover that occurred across two tax years (e.g., distribution in Dec 2024, deposit in Jan 2025)?
You report the distribution based on the year the distribution occurred (the year on your 1099-R). As long as the rollover was completed within the 60-day window, regardless of the tax year of the deposit, it should be treated as a valid rollover.
How to determine if I violated the one-rollover-per-year rule?
This rule applies only to IRA-to-IRA indirect rollovers. If you received a distribution from an IRA and redeposited it into any IRA (even the same one) and did a similar indirect IRA-to-IRA rollover in the preceding 12 months, you've violated the rule, and the second rollover amount will be taxable. Direct transfers are not subject to this rule.
How to enter a Roth IRA rollover from a Roth 401(k)?
You will typically receive a 1099-R with code 'H' in Box 7. Enter the 1099-R data. TurboTax will then ask if it was a direct rollover to a Roth IRA, and you will confirm. Since both are Roth accounts and contributions were after-tax, this is a non-taxable rollover.
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