How to report 1099-R for my my first megabackdoor ROTH last year?

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knightrider
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How to report 1099-R for my my first megabackdoor ROTH last year?

Post by knightrider »

I contributed $13k after-tax last year to my 401k. At the end of the year I called fidelity and did the in-place conversion. They said I may owe some little taxes on the earnings. On the 1099-R I got it says I owe around $165. This is peanuts but I am not sure how to report this in my tax software. It seems the way I answered the questions below is resulting in no change to my taxes. In other words, I am not getting taxed on the $165. See below:

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terran
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Re: How to report 1099-R for my my first megabackdoor ROTH last year?

Post by terran »

I don't know how to do it in your tax software, but on your form 1040 $13,461 should be on line 5a, $165 should be on line 5b and the word "Rollover" should be written to the left of 5b.
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retiredjg
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Re: How to report 1099-R for my my first megabackdoor ROTH last year?

Post by retiredjg »

knightrider wrote: Fri May 07, 2021 2:04 pm On the 1099-R I got it says I owe around $165.
You do not owe about $165 in taxes. You owe taxes on $165.

If you entered the information from the 1099, line 4b should show $165 although it may be buried in a larger number. Well terran thinks it should be on line 5b. So look on both lines.
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Duckie
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Re: How to report 1099-R for my my first megabackdoor ROTH last year?

Post by Duckie »

:sharebeer
retiredjg wrote: Fri May 07, 2021 4:23 pm If you entered the information from the 1099, line 4b should show $165 although it may be buried in a larger number. Well terran thinks it should be on line 5b. So look on both lines.
If it is an after-tax 401k to Roth 401k, which is how I read it, then the $165 will be on line 5b.
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retiredjg
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Re: How to report 1099-R for my my first megabackdoor ROTH last year?

Post by retiredjg »

I have a hope that the IRS will be able to stop moving the lines and line numbers around. The postcard size tax return has been...well, let's be nice and just call it a disappointment. :?
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neurosphere
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Re: How to report 1099-R for my my first megabackdoor ROTH last year?

Post by neurosphere »

retiredjg wrote: Sat May 08, 2021 6:06 am I have a hope that the IRS will be able to stop moving the lines and line numbers around. The postcard size tax return has been...well, let's be nice and just call it a disappointment. :?
I have a website where I have a guide/walkthrough to 1040s, W2s, W4s, etc for certain first-time taxpayers. Every year I have to edit things like "wages are on line 7 line 1", etc. Grr.

Anyway, I like the postcard return just fine. It's those dang schedules that have to go. ;)
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes" (even in taxable accounts).
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Tamarind
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Re: How to report 1099-R for my my first megabackdoor ROTH last year?

Post by Tamarind »

I'm not an expert on this but I think the issue is that you ticked the selection saying that your 1099-R was part of a rollover. That would make the transaction be reported as non-taxable. You didn't do a rollover, you did a conversion.
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