60 Day IRA Rollover Tax Reporting

[travelover]

I needed an additional $13,000 in Federal Tax withholding so I withdrew $13000 from a tIRA at Vanguard with 100% withholding, then immediately re-deposited $13000 from my credit union. When I made the second transaction, I checked the "rollover" box.

On my tax forms from Vanguard they show the withdrawal as taxable. Is that an error on their part or do I need to account for it on my taxes on a separate form?


Thanks.

 

[zinger1457]

I believe it's normal to show the distribution as taxable, haven't seen the new 1040 but on the old form you would report on line 15a the distribution ($13K) and on line 15b the taxable amount ($0), and note 'rollover' next to it. You should get a form 5498 showing the rollover. What was the benefit of taking an IRA distribution to pay the tax bill instead of just paying the bill directly from your CU?

 

[travelover]

.......... What was the benefit of taking an IRA distribution to pay the tax bill instead of just paying the bill directly from your CU?

Timing. I withdrew money from the IRA early in the year with no withholding to buy a house. If I waited to just pay the tax bill when I filed my taxes, I'd have a penalty for under withholding.

 

[jazz4cash]

Not enough information, I think. What was the code in box 7? The second transaction is not related to the first as far as VG is concerned. In my case, if I entered the 13k distribution shown on the 1099R from VG into the HR Block tax software, it will ask if any of the 13k was rolled over and if so, how much. If I enter 13k as the amount rolled over it would report that the distribution is not taxable. It will also insert the word "Rollover" on the 1040 next to the distribution line. It's line 4 on the new form

 

[gauss]

On my tax forms from Vanguard they show the withdrawal as taxable. Is that an error on their part or do I need to account for it on my taxes on a separate form?

Thanks.

Sounds like it all happened properly. You took a distribution which normally is taxable. You then rolled it over into an IRA, within the 60 day period, and hopefully only once this year. When you file your taxes, there should be an option in the software to declare this as a rollover and the taxable portion should be reduced.

The pdf of your return should display ROLLOVER somewhere to indicate to the IRS what is happening.

The recipient of the rollover, in this case Vanguard, should send you - and the IRS- a form 5498 showing the rollover contribution later this year.

At this point, you can confirm that everything was processed properly.

-gauss

 

[travelover]

Thanks everyone. I think I'm good.

 

[kaneohe]

I needed an additional $13,000 in Federal Tax withholding so I withdrew $13000 from a tIRA at Vanguard with 100% withholding, then immediately re-deposited $13000 from my credit union. When I made the second transaction, I checked the "rollover" box.

On my tax forms from Vanguard they show the withdrawal as taxable. Is that an error on their part or do I need to account for it on my taxes on a separate form?


Thanks.

The first box (taxable amount not determined) in box 2b should have been checked to counter the taxable amount in box 2a. That means that VG made a WAG as to the taxable amount since they didn't know what you were going to do w/ the money or if you had non-taxable basis in your TIRA.