I pulled $200k from my Vanguard rollover IRA retirement account for a down payment on a house. I paid back $175k within 60 days to minimize tax implications. My 1099-R reflects the entire $200k. What steps do I need to take in order to avoid taxes on $175k?
Paying back an IRA distribution within 60 days.
byu/salesandpur intax
Posted by salesandpur
2 Comments
When Turbotax asks you “Did you roll over any of the $200k?” you say “yes.” When it asks you how much you rolled over, say “$175k.”
Turbotax will then put $200k in line 4a of your Form 1040, $25k on line 4b, and the word “rollover” next to line 4b.
u/myroller was correct about what you need to do.
The one other thing that will happen is the financial institution will follow up with a form 5498. They are sent out for all contributions, rollovers, and conversions. One copy is sent to the IRS and one to you. You don’t have to do anything with your copy except keep it for your records. But that notice is what the IRS will compare against what you put on your 1040 for the rollover.