401K roth to traditional IRA Rollover mistakes: how to fix?

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Topic Author
noodle1
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Joined: Wed Apr 03, 2024 10:15 pm

401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

I made a couple mistakes when rolling over a former employer's 401k and roth 401k in January 2023. When ADP sent the rollover funds in two checks (one roth and one traditional) I mistakenly and regrettably wrote the traditional account number on both checks. The funds were deposited, and I realized my mistake a few days later. ADP said since the checks cleared, they couldn't help, and Vanguard (the new custodian) also said they couldn't help until some calls later and escalation they said they could do a return of the money as an excess contribution and would withhold the federal tax. So I thought it was settled, albeit with a hefty tax attached. Disappointed in Vanguard's handling of my mistake, I then did what I should have done in the first place and once the funds were released into a brokerage, deposited them in a roth account. I also sent the traditional money to an existing traditional Fidelity account.

In early March 2023, I noticed that the tax funds were released and made another mistake and sent those (originally roth) funds to the fidelity traditional account. So I am pretty sure the next step with that is to contact Fidelity and do an excess contribution for that portion plus any earnings. I assume this will be taxed and will generate another 1099R. Is there anything else I need to do here?

On my 1099R from Vanguard, there are two codes: 1,8. Tax Slayer software will not let me enter more than one code, and after speaking with Vanguard a few more times, they are adamant that they cannot edit 1099's. So I wonder if these codes are correct, and how to fix this or file my taxes if 2 codes are correct. It also lists the total amount as taxable. Had I known this, I would have just taken the money and not routed it to a roth ira.

Also in taxslayer, it will not let me enter the same amoun in box1 and 2a. I clicked the box that asked if I rolled it over into another retirement account (which I did, the full amount).

Any advice on how to proceed? I have not filed yet and am wondering what forms I need to explain this error and how I file letter of explanation to the IRS.
I really appreciate the help or guidance anyone may offer. Thank you.
Last edited by noodle1 on Thu Apr 11, 2024 12:15 pm, edited 1 time in total.
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Eagle33
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by Eagle33 »

Try typing 18 in box 7 without a space or comma.
Topic Author
noodle1
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

Thanks for the reply. So 18 will be read as the same as the two codes?

Is there anything else I need to do?

Thanks again.
Alan S.
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by Alan S. »

noodle1 wrote: Tue Apr 09, 2024 1:52 pm Thanks for the reply. So 18 will be read as the same as the two codes?

Is there anything else I need to do?

Thanks again.
Should be the same whether you enter them as 18 or 81. The 1099R is correct. Check the output to determine if it produces the expected result, which is that the amount in Box 2a is taxable income on line 4b of Form 1040. Also, note that there should be no 10% penalty on this income. If there is, you can override it with Form 5329, exception code 21.
Topic Author
noodle1
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

Ok thank you!

The formula for calculating the amount needed to withdraw on the excess contribution that has been sitting in Fidelity in an index fund (the amount Vangaurd held and then released) that I erroneously deposited into a TIRA is:

Net income = excess contribution× AOB / ACB−AOB

​where:
AOB=Adjusted Opening Balance
ACB=Adjusted Closing Balance
Topic Author
noodle1
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

Taxslayer is also saying "2a Taxable Amount cannot be greater than Gross Distribution minus Rollover amount." Both amounts in 1 and 2a are the same on this 1099-R. Wondering how to fix?

Also thank you for the specific codes/forms to override the 10% penalty Alan S.
Topic Author
noodle1
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

Fidelity and Vanguard are not willing to work with us and are instead telling us to work with a tax professional.

Is there anything I can do?

Or should I just hire a CPA to be done with this?

I had no idea such a dumb mistake would be such a headache. Thanks for any adivice.
Alan S.
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by Alan S. »

noodle1 wrote: Thu Apr 25, 2024 5:29 pm Fidelity and Vanguard are not willing to work with us and are instead telling us to work with a tax professional.

Is there anything I can do?

Or should I just hire a CPA to be done with this?

I had no idea such a dumb mistake would be such a headache. Thanks for any adivice.
Did you actually make the same error twice?

There is little hope of restoring the funds to the Roth IRA due to the amount of time since the initial distribution. There is a revenue procedure (2020-46) that extends the 60 day rollover period if you file a self certification form for the error, but the custodians are looking for this form within 30 days, or certainly no longer than 90 days from the error. Therefore, if these custodians will not accept such a form at this late date, that is to be expected.

But you still must correct the error of an excess contribution like you did the first time, and for that procedure the custodian must cooperate and accept the removal of the current excess.

Did you get a 1099R in January coded H in Box 7 (the Roth 401k rollover), and if so what was the amount in Boxes 1 and 5?

I have been involved with a few of these messes recently, and almost all of them result in over 20 private messages, and I really do not have that much time anymore, so I wanted to disclose that up front.
Topic Author
noodle1
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

I understand and appreciate your disclosure. I also appreciate you taking the time to comment. Yes, I feel awful, I made this mistake twice.

I believe the 1099-R you are referring to is from Vanguard (ADP was the 401k custodian from which I rolled over the funds and I also recieved 1099-R's from them too.). The codes in box 7 (there are two:) 1,8 and the amount in box 1 is $26589.82 (which was the excess distribution that is now correctly in a roth.) And box 5 is blank. Vanguard claims this coding is correct. TaxSlayer had other things to say stating this is not correct.

I promise not to message you. But again, I do appreciate you responding when you have time.

Total roth rollover amount was $2954.42 (the roth funds that were withheld as federal tax by Vangaurd but then released in 2023 that I stupidly sent to a traditional at Fidelity) PLUS $26589.82 (which was removed and moved to the correct tax bucket account). Roth 401k rollover funds end up totaling $29544.24.

At this point I would be ecstatic if I manage to prove that this is all legitimate in the eyes of the IRS.
Last edited by noodle1 on Fri Apr 26, 2024 3:45 pm, edited 3 times in total.
JoeNJ28
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by JoeNJ28 »

Honestly after compounding the mistake by doing it a second time i would just pay a CPA to handle it in case it ever gets questioned in the future by the IRS. Spend the extra money now to have a good (not your local liberty tax or jackson hewitt) look at it fix it, then chalk it up as an expensive lesson to always slow down and double check your work.
Topic Author
noodle1
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

I think you may be right. What I can't seem to get an answer about is the 1099-R coding stating that this is taxable and then the fact that they withheld and then released federal taxes?

Any ideas as to why that happened and with no communication about it?
Alan S.
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by Alan S. »

noodle1 wrote: Fri Apr 26, 2024 3:36 pm I understand and appreciate your disclosure. I also appreciate you taking the time to comment. Yes, I feel awful, I made this mistake twice.

I believe the 1099-R you are referring to is from Vanguard (ADP was the 401k custodian from which I rolled over the funds and I also recieved 1099-R's from them too.). The codes in box 7 (there are two:) 1,8 and the amount in box 1 is $26589.82 (which was the excess distribution that is now correctly in a roth.) And box 5 is blank. Vanguard claims this coding is correct. TaxSlayer had other things to say stating this is not correct.

I promise not to message you. But again, I do appreciate you responding when you have time.

Total roth rollover amount was $2954.42 (the roth funds that were withheld as federal tax by Vangaurd but then released in 2023 that I stupidly sent to a traditional at Fidelity) PLUS $26589.82 (which was removed and moved to the correct tax bucket account). Roth 401k rollover funds end up totaling $29544.24.

At this point I would be ecstatic if I manage to prove that this is all legitimate in the eyes of the IRS.
Would like to know the Boxes 1, 2a, 4, 5 and 7 amounts or codes for each 1099R you received in January for 2023, and the type of the account they are for. I assume the 1 and 8 coded 1099R was for the VG TIRA account.

Did you file an extension for the 2023 return, or perhaps filed an incorrect return by 4/15?
Topic Author
noodle1
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

Alan S. thank you!!

ADP 1099-R (1): box 1: 30106.95 2a: 0.00 4: 0.00 5: 29001.87 7:H (this is for the Roth funds)

ADP 1099-R (2): 1: 41256.41 2a:0 4: 0 5:0 7:G (this is traditional funds and is fine, as far as I know)

VG 1099-R: 1: 26589.82 2a: 26589.82 4: blank 5: blank 7: 1, 8 (for the excess contribution removal of roth funds that were placed in trad accont during rollover)

I should add that there were 2 more checks that will contribute to these totals (4 checks total). One check is Roth totaling $590.51 and traditional $2362.02 that were (blessedly) placed into the correct accounts and separate from this mess. I thought to mention these amounts because they are included in the ADP 1099-R totals. The total that went to VG that began this mess was: $29516.44 (roth) and $38894.39 (Trad).

I have a feeling VG didn't do this correctly (but hey, I'm the dumb dumb who made this whole mess), but I have not had luck getting anywhere and they said they cannot correct the 1099-R or to say why they withheld tax and then released it without explanation or notice.

I filed an extension for 2023 and it was approved. I did not want to make it worse, maybe?
Alan S.
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by Alan S. »

noodle1 wrote: Fri Apr 26, 2024 5:25 pm Alan S. thank you!!

ADP 1099-R (1): box 1: 30106.95 2a: 0.00 4: 0.00 5: 29001.87 7:H (this is for the Roth funds)

ADP 1099-R (2): 1: 41256.41 2a:0 4: 0 5:0 7:G (this is traditional funds and is fine, as far as I know)

VG 1099-R: 1: 26589.82 2a: 26589.82 4: blank 5: blank 7: 1, 8 (for the excess contribution removal of roth funds that were placed in trad accont during rollover)

I should add that there were 2 more checks that will contribute to these totals (4 checks total). One check is Roth totaling $590.51 and traditional $2362.02 that were (blessedly) placed into the correct accounts and separate from this mess. I thought to mention these amounts because they are included in the ADP 1099-R totals. The total that went to VG that began this mess was: $29516.44 (roth) and $38894.39 (Trad).

I have a feeling VG didn't do this correctly (but hey, I'm the dumb dumb who made this whole mess), but I have not had luck getting anywhere and they said they cannot correct the 1099-R or to say why they withheld tax and then released it without explanation or notice.

I filed an extension for 2023 and it was approved. I did not want to make it worse, maybe?
Good that you filed an extension.

The 1099R forms from ADP are correct, but most of the Roth funds went to the TIRA in error. It's unlikely you recall or made a copy of the ADP checks, but depending on how the Roth check payee was shown, VG might have intercepted the error (your entering the wrong AC number). If the check payee indicated "VG FBO noodle Roth IRA" instead of just "VG FBO noodle IRA" VG could have inquired about the inconsistency of your indicated account number and the "Roth IRA" payee on the check.

The VG 1099R is incorrect. I assume that you requested the removal of what became an excess IRA contribution because Roth 401k distributions are not eligible to be contributed to a TIRA, and VG accepted that explanation as reflected in the 1,8 code on the 1099R. As such, Box 2a should only include any gain on the excess contribution, not the full 26,590. In other words, the box 2a amount is in direct conflict with the 1,8 coding. VG needs to correct that 1099R to show only the earnings (if there were any earnings. There might have been a small loss). It's not clear whether you requested the correct amount of excess to be returned. Since the 591 check correctly went to the VG Roth, then 29,516 was the excess amount. My guess is that the 1099R reduced amount of 26,590 reflects the withholding snafu. Any withholding should show in Box 4, but there is none there. What happened to the missing 2,926? Is it possible that Box 1 is only 26,590 due to investment losses between Jan and March, or was withholding the issue? Note that if there was any withholding, the amount should have been included in Box 1 and 4 both. There could be multiple issues with that VG 1099R. Could you further explain your comment about VG "releasing the withholding" and where those funds are now.

You will have to report the H coded 1099R from ADP as a taxable distribution because it went into an ineligible account. That means your Roth 401k was distributed, but the taxable amount is only 1,105 (the excess of Box 1 over Box 5). 1105 was the gain on your contributions. You will owe the 10% early distribution tax on those gains ($111).

Would like to get the above cleared up before exploring the move from VG to Fidelity.
Topic Author
noodle1
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

Alan S. thanks again.

Here are the chronological events:
01/23 01/23-CHECK PURCHASE Rollover---- $68,410.83 (these were two checks, no explanation as to why they were lumped as one sum. I do not have check stubs for these, but do have the info on the checks. They were different: TIRA said VG XXX FBO noodle $38894.39 while Roth said VG (no account #) FBO Noodle. But Vanguard is adamant it is my error because I think I wrote the TIRA account number on each check. And I do accept responsibility and am not hopeful they will say that because the checks were different that they should have looked into it at that point.
01/24 01/24-VANGUARD FEDERAL MONEY Sweep in---- -68,410.83

01/31 01/31-EXCESS EARNINGS <591/2 Distribution---- -$26,589.82
01/31 01/31-FED W/H EXCESS EARN Federal Withholding---- -2,954.42
FED W/H
01/31 01/31-VANGUARD FEDERAL MONEY Sweep out----26,589.82
MARKET FUND
02/02 02/02-VANGUARD FEDERAL MONEY Sweep out---- 2,954.42
MARKET FUND
02/15 02/15-VANGUARD FEDERAL MONEY Dividend---- 64.09
MARKET FUND
02/15 02/15-VANGUARD FEDERAL MONEY Sweep out---- 38,931.03 ( this is TIRA funds that I took to an existing fidelity account directly via ACAT)
02/16 02/16-TRANSFER CASH BALANCE Transfer (out)---- -38,985.50
02/21 02/21-TRANSFER CASH BALANCE Transfer (out)---- -9.62 (this must be earnings?)

01/31 01/31-FED W/H EXCESS EARN Federal Withholding---- $2,945.42
REVERSAL
01/31 01/31-FED W/H EXCESS EARN Federal Withholding---- -2,945.42
FED TAX
01/31 01/31-FED W/H EXCESS EARN Federal Withholding---- 2,954.42
REVERSAL
03/08 03/08-TRANSFER CASH BALANCE Transfer (out)---- -2,945.42
03/16 03/16-TRANSFER CASH BALANCE Transfer (out)---- -9.0 (earnings also?)

I feel the 1099R does need to be edited by VG because, from what I understand, the 2a amount is not correct. The remainder that was released was what they withheld as tax ($2945.42).

To be clear, this rollover happened when I got laid off, and the second set of two checks I mentioned ($591 and $2362) NEVER WENT TO VG, they were the final set of wages that had my original settings for what would go to the company sponsored retirement savings. I put them correctly in existing Fidelity accounts (roth:roth and Trad:trad).

My second mistake was (as you can see on 3/8/23) I transferred what are Roth funds to a TIRA at Fidelity (who now are saying they can't take it out. I need stronger CPA language to persuade them I suppose). I now realize I should have called immediately when I saw the funds in the account and had them distributed. But? I did not. It seems that they did all this on Jan 31, but no one called or sent a message about it.

Because it's all over the phone, it has taken hours to get anywhere and then they say it will take a few days to get back to me and to consult a tax professional.

What language do I use to get this corrected? Thank you again. This is immensely helpful.
Alan S.
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by Alan S. »

noodle1 wrote: Sat Apr 27, 2024 4:13 pm Alan S. thanks again.

Here are the chronological events:
01/23 01/23-CHECK PURCHASE Rollover---- $68,410.83 (these were two checks, no explanation as to why they were lumped as one sum. I do not have check stubs for these, but do have the info on the checks. They were different: TIRA said VG XXX FBO noodle $38894.39 while Roth said VG (no account #) FBO Noodle. But Vanguard is adamant it is my error because I think I wrote the TIRA account number on each check. And I do accept responsibility and am not hopeful they will say that because the checks were different that they should have looked into it at that point.
01/24 01/24-VANGUARD FEDERAL MONEY Sweep in---- -68,410.83

01/31 01/31-EXCESS EARNINGS <591/2 Distribution---- -$26,589.82
01/31 01/31-FED W/H EXCESS EARN Federal Withholding---- -2,954.42
FED W/H
01/31 01/31-VANGUARD FEDERAL MONEY Sweep out----26,589.82
MARKET FUND
02/02 02/02-VANGUARD FEDERAL MONEY Sweep out---- 2,954.42
MARKET FUND
02/15 02/15-VANGUARD FEDERAL MONEY Dividend---- 64.09
MARKET FUND
02/15 02/15-VANGUARD FEDERAL MONEY Sweep out---- 38,931.03 ( this is TIRA funds that I took to an existing fidelity account directly via ACAT)
02/16 02/16-TRANSFER CASH BALANCE Transfer (out)---- -38,985.50
02/21 02/21-TRANSFER CASH BALANCE Transfer (out)---- -9.62 (this must be earnings?)

01/31 01/31-FED W/H EXCESS EARN Federal Withholding---- $2,945.42
REVERSAL
01/31 01/31-FED W/H EXCESS EARN Federal Withholding---- -2,945.42
FED TAX
01/31 01/31-FED W/H EXCESS EARN Federal Withholding---- 2,954.42
REVERSAL
03/08 03/08-TRANSFER CASH BALANCE Transfer (out)---- -2,945.42
03/16 03/16-TRANSFER CASH BALANCE Transfer (out)---- -9.0 (earnings also?)

I feel the 1099R does need to be edited by VG because, from what I understand, the 2a amount is not correct. The remainder that was released was what they withheld as tax ($2945.42).

To be clear, this rollover happened when I got laid off, and the second set of two checks I mentioned ($591 and $2362) NEVER WENT TO VG, they were the final set of wages that had my original settings for what would go to the company sponsored retirement savings. I put them correctly in existing Fidelity accounts (roth:roth and Trad:trad).

My second mistake was (as you can see on 3/8/23) I transferred what are Roth funds to a TIRA at Fidelity (who now are saying they can't take it out. I need stronger CPA language to persuade them I suppose). I now realize I should have called immediately when I saw the funds in the account and had them distributed. But? I did not. It seems that they did all this on Jan 31, but no one called or sent a message about it.

Because it's all over the phone, it has taken hours to get anywhere and then they say it will take a few days to get back to me and to consult a tax professional.

What language do I use to get this corrected? Thank you again. This is immensely helpful.
With respect to the incorrect VG 1099R coded 1,8, the following is copied from p 8 of the 1099R Instructions for 2023:
Corrected Form 1099-R
If you filed a Form 1099-R with the IRS and later discover that
there is an error on it, you must correct it as soon as possible.
Further, the following is copied from 11 of the 1099R Inst.
For a distribution of contributions plus earnings from an
IRA before the due date of the return under section 408(d)(4),
report the gross distribution in box 1, only the earnings in
box 2a, and enter Code 8 or P, whichever is applicable, in
box 7. Also, enter Code 1 or 4, if applicable.
Apparently, you correctly convinced VG that the Roth money that was contributed to the TIRA was an excess contribution that needed to be moved with allocated earnings, if any. VG did so but botched the transaction and Box 2a included the total distribution, not just earnings which is incorrect per the above quote. The code 8 identifies the distribution as a removal of excess by the due date.

By may calcs the corrected 1099R that VG should issue would show 29,544 in Box 1 (adds the WH back), and 2a should only be $28 because the actual excess was 29,516 and the amount with earnings was 29,544, a gain of $428.

VG should issue a corrected 2023 1099R with the above figures. While you mistake caused the excess, the botched correction and 1099R was all VG's error, so they should agree to correct it. Tell VG if they still refuse to correct it, you will have to correct it yourself using Form 4852 and if you request the form from the IRS, they may contact VG. Since VG does not want to be contacted by the IRS for this, they may be more likely to correct the 1099R, and you would then not need the 4852. See following instructions and form:

https://www.irs.gov/taxtopics/tc154
https://www.irs.gov/pub/irs-pdf/f4852.pdf

To put in perspective, the 1099R as issued will result in taxable income of 26,590, with the correction it would only be $28. If this is resolved by Sept, you can file using the correct figures by the extension deadline. But this only resolves your 2023 return, and I think you have the same excess issue with Fidelity which must be handled this year, but hopefully without the 1099R errors made by VG.

The deadline for Fidelity to return the excess from their TIRA (the former Roth money) is 10/15/2024. The Fidelity excess may be a somewhat different figure, but close, and being in the Fidelity TIRA for over a year, the gains could be a few thousand, if invested in stocks for the last 14 months. You might start to work on that one ASAP, since you will also need that resolved to file your 2023 return. (Even though that corrective distribution will be this year, because the excess was made in 2023, the gain will be taxable in 2023, but the 1099R from Fidelity will be issued next January with code P (prior year). The 1 may be dropped because they should know there is no penalty on corrective distributions anymore.

To summarize:

1) 1105 (gain on the Roth 401k distribution) 10% penalty applies
2) 28 (gain on the VG excess from corrected 1099R coded 1,8) No penalty
3) TBD gain on the future excess removal from Fidelity. No penalty.
Topic Author
noodle1
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Joined: Wed Apr 03, 2024 10:15 pm

Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

Ah, thanks again Alan S.! You did it again!

I will contact VG and ask them to edit the 1099-R, if you're interested, I'll post here if they agree or not. I'll also mention the 4852 request and hopefully they relent. I think part of it is that I keep communicating with people who don't know how to do this.

Also really appreciate the next steps with my Fidelity mistake. Anything I can say to persuade them? I have tried to keep it simple and not go into backstory about the initial mistake (VG rollover commingling/withholding/transfer/etc.) but they flat out said they couldn't do it. Should I use the 4852 reference with them as well? They have also told me, since it is invested in some index funds, that it is on me to calculate the earnings. Is this correct? How do I do that? It sounds like this is their job so that they can put it in 2a on the 1099-R.

Again, thank you so much. For 2023, besides getting the 1099-R corrected, persuading Fidelity to do the corrective distribution, and attaching a letter of explanation (if even possible?), and filing before my deadline, is there anything else for 2023 I need to do at this point?

As you mentioned, I am assuming that 2024 will have a 1099-R from Fidelity and I will proceed in the same manner.
Alan S.
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Location: Prescott, AZ

Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by Alan S. »

noodle1 wrote: Sun Apr 28, 2024 1:25 pm Ah, thanks again Alan S.! You did it again!

I will contact VG and ask them to edit the 1099-R, if you're interested, I'll post here if they agree or not. I'll also mention the 4852 request and hopefully they relent. I think part of it is that I keep communicating with people who don't know how to do this.

Also really appreciate the next steps with my Fidelity mistake. Anything I can say to persuade them? I have tried to keep it simple and not go into backstory about the initial mistake (VG rollover commingling/withholding/transfer/etc.) but they flat out said they couldn't do it. Should I use the 4852 reference with them as well? They have also told me, since it is invested in some index funds, that it is on me to calculate the earnings. Is this correct? How do I do that? It sounds like this is their job so that they can put it in 2a on the 1099-R.

Again, thank you so much. For 2023, besides getting the 1099-R corrected, persuading Fidelity to do the corrective distribution, and attaching a letter of explanation (if even possible?), and filing before my deadline, is there anything else for 2023 I need to do at this point?

As you mentioned, I am assuming that 2024 will have a 1099-R from Fidelity and I will proceed in the same manner.
Good question regarding the Fidelity error, since they do not have the same info that VG had to identify the disallowed rollover. While it would be easier for you to avoid having to explain the entire background, you may have to as Fidelity could suspect a scheme to withdraw from their IRA tax free unless you can document the prior transactions.

What amount did you roll over to Fidelity? Was it the same as the 1,8 coded 1099R from VG?
Topic Author
noodle1
Posts: 18
Joined: Wed Apr 03, 2024 10:15 pm

Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

I rolled over the $2954.42 (the withholding amount) which are roth funds that were rolled from ADP into a traditional at VG that I moved to a traditional at Fidelity. And yes, I also deposited the excess removal ($26k) that was on the 1,8 coded 1099 into a roth at Fidelity, which I think is what you're asking. Everything is at Fidelity now. I was trying Vanguard out since this is my first rollover, and once I made the rollover mistake, I decided I should just stick with Fidelity.

I asked via Fidelity chat for the excess removal form (and they sent it!) and they still told me to see a CPA to calculate the removal. The rep said this which I don't understand (isn't Fidelity going to calculate the earnings anyhow? Is there a formula to calculate the earnings?):
Speaking to the CPA about it is more because Fidelity has no record of the Roth contribution that was contributed to this pre-tax IRA. Since it was rolled into Fidelity from another firm, the amount contributed that was made after tax is up to you and a CPA to determine.
On the excess removal form they sent, they state they withhold 10% or I can elect to withhold nothing. Can I withhold nothing or is this amount subject to a 10% penalty (in addition to the 6% on earnings)?\

And again, thank you Alan S!!
Alan S.
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by Alan S. »

noodle1 wrote: Mon Apr 29, 2024 9:12 pm I rolled over the $2954.42 (the withholding amount) which are roth funds that were rolled from ADP into a traditional at VG that I moved to a traditional at Fidelity. And yes, I also deposited the excess removal ($26k) that was on the 1,8 coded 1099 into a roth at Fidelity, which I think is what you're asking. Everything is at Fidelity now. I was trying Vanguard out since this is my first rollover, and once I made the rollover mistake, I decided I should just stick with Fidelity.

I asked via Fidelity chat for the excess removal form (and they sent it!) and they still told me to see a CPA to calculate the removal. The rep said this which I don't understand (isn't Fidelity going to calculate the earnings anyhow? Is there a formula to calculate the earnings?):
Speaking to the CPA about it is more because Fidelity has no record of the Roth contribution that was contributed to this pre-tax IRA. Since it was rolled into Fidelity from another firm, the amount contributed that was made after tax is up to you and a CPA to determine.
On the excess removal form they sent, they state they withhold 10% or I can elect to withhold nothing. Can I withhold nothing or is this amount subject to a 10% penalty (in addition to the 6% on earnings)?\

And again, thank you Alan S!!
Your initial post stated that you rolled over the VG distribution (coded 1,8) into a traditional IRA. This post states that it went to a Roth IRA. Please clarify.
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noodle1
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

Apologies for the miscommunication. There are several layers to my mistakes here. I will attempt to clarify. This is the part of the initial post which I added some to hopefully clarify:

I rolled over part of the Roth funds to a traditional at Fidelity. That amount is $2954 (the amount Vanguard withheld for Federal tax but then released) and is not included in the Vanguard 1099R coded 1,8 at all. The other part (which is on this 1099 is about $26k) and went into a Roth at Fidelity. It is the amount in box 2a and needs to be corrected by Vanguard.
I made a couple mistakes when rolling over a former employer's 401k and Roth 401k in January 2023. When ADP sent the rollover funds in two checks (one Roth and one traditional) I...wrote the traditional account number on both checks. The Roth funds were deposited (into a traditional account), ...Vanguard (the new custodian) also said ...they could do a return of the Roth money as an excess contribution and would withhold the federal tax.... Once the funds were released into a brokerage via excess contribution removal, I deposited them in an existing Roth account at Fidelity. I also sent the traditional money to an existing traditional Fidelity account.
In summary:

The Vanguard coded 1,8 1099 funds were in fact Roth 401k funds that I rolled into a traditional IRA Vanguard account, they were removed via an excess contribution removal (the amount in the Vanguard 1099R coded 1,8 which does not include the $2945 they withheld and then released. I sent the $2945 to a traditional at Fidelity and am working on removing that) and I took the funds that were removed ($26k) and deposited them into an existing Roth at Fidelity.

Also: Is that an appropriate sequence of events? Since they were Roth, then commingled, I assumed I needed to put them into Roth to rectify the initial error.
Alan S.
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by Alan S. »

noodle1 wrote: Tue Apr 30, 2024 11:24 am Apologies for the miscommunication. There are several layers to my mistakes here. I will attempt to clarify. This is the part of the initial post which I added some to hopefully clarify:

I rolled over part of the Roth funds to a traditional at Fidelity. That amount is $2954 (the amount Vanguard withheld for Federal tax but then released) and is not included in the Vanguard 1099R coded 1,8 at all. The other part (which is on this 1099 is about $26k) and went into a Roth at Fidelity. It is the amount in box 2a and needs to be corrected by Vanguard.
I made a couple mistakes when rolling over a former employer's 401k and Roth 401k in January 2023. When ADP sent the rollover funds in two checks (one Roth and one traditional) I...wrote the traditional account number on both checks. The Roth funds were deposited (into a traditional account), ...Vanguard (the new custodian) also said ...they could do a return of the Roth money as an excess contribution and would withhold the federal tax.... Once the funds were released into a brokerage via excess contribution removal, I deposited them in an existing Roth account at Fidelity. I also sent the traditional money to an existing traditional Fidelity account.
In summary:

The Vanguard coded 1,8 1099 funds were in fact Roth 401k funds that I rolled into a traditional IRA Vanguard account, they were removed via an excess contribution removal (the amount in the Vanguard 1099R coded 1,8 which does not include the $2945 they withheld and then released. I sent the $2945 to a traditional at Fidelity and am working on removing that) and I took the funds that were removed ($26k) and deposited them into an existing Roth at Fidelity.

Also: Is that an appropriate sequence of events? Since they were Roth, then commingled, I assumed I needed to put them into Roth to rectify the initial error.
The VG 1099 is incorrect in two respects:
1) Box 2a should only include any gains on the removal, and there may have been none.
2) The withholding, which was not sent to the IRS for some reason, should have been included in Box 1 of that 1099R.

So there are multiple errors on that 1099R that VG should correct. If they still refuse, Form 4852 (substitute 1099R) would be your procedure to eliminate the taxable income and incorporate the amount that was originally withheld. You should complete the 4852 with the correct figures that VG should have shown on the incorrect 1099R they issued with code 1,8. There would be little or no gains in Box 2a. Codes 1 and 8 are correct.

Deposit of the Roth funds into a traditional IRA was a distribution as of the date of that deposit, so you must report the H coded 1099R from ADP as a distribution, not a direct rollover as was originally intended per the H coding.

It appears that the date the Roth 401k money was first deposited in a TIRA was 1/23/23. That money (26k) was removed from the TIRA, but what date did you roll it into your Roth IRA?
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noodle1
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

Deposit of the Roth funds into a traditional IRA was a distribution as of the date of that deposit, so you must report the H coded 1099R from ADP as a distribution, not a direct rollover as was originally intended per the H coding.
Regarding the ADP 1099 code H, do I need to change that myself using the same procedure? i.e. asking ADP to edit the 1099R? Will that distribution be subject to penalty?
It appears that the date the Roth 401k money was first deposited in a TIRA was 1/23/23. That money (26k) was removed from the TIRA, but what date did you roll it into your Roth IRA?
2/16/2023.
Alan S.
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by Alan S. »

noodle1 wrote: Tue Apr 30, 2024 8:10 pm
Deposit of the Roth funds into a traditional IRA was a distribution as of the date of that deposit, so you must report the H coded 1099R from ADP as a distribution, not a direct rollover as was originally intended per the H coding.
Regarding the ADP 1099 code H, do I need to change that myself using the same procedure? i.e. asking ADP to edit the 1099R? Will that distribution be subject to penalty?
It appears that the date the Roth 401k money was first deposited in a TIRA was 1/23/23. That money (26k) was removed from the TIRA, but what date did you roll it into your Roth IRA?
2/16/2023.
ADP will not change their 1099R because it was accurate as issued. You will have to report that as a distribution, but amounts you rolled into a Roth IRA within 60 days (which I did not understand till now) should allow you to report the H coded 1099R as a distribution and 60 day rollover, which should preserve your Roth money, and there would be no tax or penalty if you report this rollover. Verify that Fidelity coded that Roth contribution as a rollover contribution but it will probably fall short of the 30,107 that was distributed. But the shortfall will be non taxable because the small amount of gains that were included on the H coded 1099R are treated as the first dollars rolled over. When reporting the current H coded 1099R which was not completed as a direct rollover, instead of H use Codes B,1 which are for Roth distributions that are not direct rollovers.

Of course, any other Roth money that ended up in a TIRA will have to be removed in the same manner as the corrective distribution done at VG. Such removed amounts are not eligible for any rollover since well over 60 days has passed.

Since there will be a totally messed up paper trail, there is probably nothing you can do to prevent an IRS inquiry after you file your return. By the end of May you and the IRS should have received Form 5498 from each IRA account that received either rollover or regular contributions, but if the IRS tries to reconcile them with the 1099R forms and your tax return, they will likely not be able to figure it out due to the complexity and number of errors made and at least 2 1099R forms that you already have than cannot be reported as issued. But hopefully, you can avoid any large taxable amounts. Of course, the Fidelity 1099R forms for 2024 transactions will not be issued until January.

Note that if you took this combination of errors to 10 different CPAs, I bet that for those even interested in diving into it, there would be several different takes on it with no guarantee that the IRS would accept any of them without an inquiry. So perhaps you should save your money and try to do it yourself. Also, your 2024 return will not be any easier than the 2023 return because there will be other transactions required this year.

The first priority is to either get VG to correct that 1099R or get their refusal and proceed with Form 4852 to correct it yourself. Sounds like 2954 is the only remaining excess contribution you have to remove from the Fidelity TIRA.
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noodle1
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

Note that if you took this combination of errors to 10 different CPAs, I bet that for those even interested in diving into it, there would be several different takes on it with no guarantee that the IRS would accept any of them without an inquiry. So perhaps you should save your money and try to do it yourself. Also, your 2024 return will not be any easier than the 2023 return because there will be other transactions required this year.
This is my feeling too. Thank you for pointing that out. I am hoping that I can explain myself during the inquiry and show that I just made a series of mistakes and am not trying to game anything. Would it make sense to visit an IRS tax site? My intuition is that they wouldn't know how to help either.
When reporting the current H coded 1099R which was not completed as a direct rollover, instead of H use Codes B,1 which are for Roth distributions that are not direct rollovers.
If I understand correctly, I will report a different code(s) (B,1) than appear on the ADP 1099 (H) when filing my taxes and this will trigger tax liability since it's not a rollover?
Sounds like 2954 is the only remaining excess contribution you have to remove from the Fidelity TIRA.
Correct. Is the $2954 going to simply be income now once it is distributed? Or will I be able to place it back in an IRA (it is technically Roth, but not sure at this point what to do with it once it's out). Do I have a case for requesting a late rollover waiver for the $2954 since (I think) Vanguard made an error? I think you've already indicated that I do not.

I am working on getting someone at Vanguard to issue a correction. It has been troublesome to reach the correct person within a reasonable amount of time. I hope to have it settled by the end of this week or I will proceed with 4852.

Fidelity sent an excess removal form that I am working on and do not want to mess up. Technically this is a "Prior tax year" filing (the form has two options: prior or current and I am guessing this is prior year? Also should I elect to have federal/state tax withheld? I also selected "method 1" for the Method of Correction which I have pasted below:

"Method 1: Correction Before Tax-Filing Deadline (plus extensions)
I am correcting this excess contribution before the later of my tax-filing deadline (including any extensions)
of the year in which the excess contribution was made, or within six months of my tax-filing deadline if I
timely file my tax return.
I understand that this correction is a taxable event and that I will receive a 1099-R form for the full amount of
the excess plus any applicable earnings. The earnings should be included as income in the year the contribution
was made."

Once again, thank you Alan S. Extremely helpful.
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by Alan S. »

noodle1 wrote: Wed May 01, 2024 8:31 am
Note that if you took this combination of errors to 10 different CPAs, I bet that for those even interested in diving into it, there would be several different takes on it with no guarantee that the IRS would accept any of them without an inquiry. So perhaps you should save your money and try to do it yourself. Also, your 2024 return will not be any easier than the 2023 return because there will be other transactions required this year.
This is my feeling too. Thank you for pointing that out. I am hoping that I can explain myself during the inquiry and show that I just made a series of mistakes and am not trying to game anything. Would it make sense to visit an IRS tax site? My intuition is that they wouldn't know how to help either.
When reporting the current H coded 1099R which was not completed as a direct rollover, instead of H use Codes B,1 which are for Roth distributions that are not direct rollovers.
If I understand correctly, I will report a different code(s) (B,1) than appear on the ADP 1099 (H) when filing my taxes and this will trigger tax liability since it's not a rollover?
Sounds like 2954 is the only remaining excess contribution you have to remove from the Fidelity TIRA.
Correct. Is the $2954 going to simply be income now once it is distributed? Or will I be able to place it back in an IRA (it is technically Roth, but not sure at this point what to do with it once it's out). Do I have a case for requesting a late rollover waiver for the $2954 since (I think) Vanguard made an error? I think you've already indicated that I do not.

I am working on getting someone at Vanguard to issue a correction. It has been troublesome to reach the correct person within a reasonable amount of time. I hope to have it settled by the end of this week or I will proceed with 4852.

Fidelity sent an excess removal form that I am working on and do not want to mess up. Technically this is a "Prior tax year" filing (the form has two options: prior or current and I am guessing this is prior year? Also should I elect to have federal/state tax withheld? I also selected "method 1" for the Method of Correction which I have pasted below:

"Method 1: Correction Before Tax-Filing Deadline (plus extensions)
I am correcting this excess contribution before the later of my tax-filing deadline (including any extensions)
of the year in which the excess contribution was made, or within six months of my tax-filing deadline if I
timely file my tax return.
I understand that this correction is a taxable event and that I will receive a 1099-R form for the full amount of
the excess plus any applicable earnings. The earnings should be included as income in the year the contribution
was made."

Once again, thank you Alan S. Extremely helpful.
Re visiting an IRS office - you wouldn't decide on that until after you receive the inquiry, which will probably be in 2025 at the soonest. You probably will not file 2023 until summer.

Re filing the B,1 codes on a 4852 - this will be a distribution, but will not be taxable because:
1) The Roth 401k balance was almost entirely your contributions, only about 1000 in gains
2) You would also be reporting a partial rollover, which you were able to complete within 60 days, and the partial rollover includes the 1000 in gains, leaving no taxable income on line 5b of Form 1040. The portion which was not rolled over within 60 days (2954) cannot go back into a Roth IRA now, but it will not be taxable, except for any earnings on it while in the FIdelity TIRA. Fidelity should report the rollover contribution on Form 5498 issued this month. Watch for it. Also once corrected Fidelity will issue a 1099R coded 1,8 showing only the earnings returned in Box 2a. Those earnings will be taxable on line 4b of your 2023 return.
3) The 2954 is not eligible for return to a Roth IRA due to the long time delay (15 months). This amount is effectively lost from your retirement plans but will not be taxed.

The Fidelity excess removal form is for a prior year excess contribution (2023) because the disallowed rollover contribution to the TIRA was done in 2023. Decline withholding, which is normal for a return of excess. Yes, method 1 is correct.
Topic Author
noodle1
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

The Fidelity excess removal form is for a prior year excess contribution (2023) because the disallowed rollover contribution to the TIRA was done in 2023. Decline withholding, which is normal for a return of excess. Yes, method 1 is correct.
Top
Great, thank you. When removing the $2954, Fidelity's form asks if this is an IRA that was transferred? Is yes the correct answer? Was this IRA transferred from Vanguard when I took the $2954 and sent it to Fidelity?
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by Alan S. »

noodle1 wrote: Wed May 01, 2024 2:59 pm
The Fidelity excess removal form is for a prior year excess contribution (2023) because the disallowed rollover contribution to the TIRA was done in 2023. Decline withholding, which is normal for a return of excess. Yes, method 1 is correct.
Top
Great, thank you. When removing the $2954, Fidelity's form asks if this is an IRA that was transferred? Is yes the correct answer? Was this IRA transferred from Vanguard when I took the $2954 and sent it to Fidelity?
No. The excess contribution in this case started upon the contribution to the Fidelity TIRA. It was a new excess contribution, not a continuation of the first excess contribution, since that one had been removed earlier.
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noodle1
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

1. Thank you for clearing that up about the transfer. I am learning a lot here. I really appreciate this.

2. In regard to your previous message, Alan S.:
But hopefully, you can avoid any large taxable amounts. Of course, the Fidelity 1099R forms for 2024 transactions will not be issued until January.
This makes me mildly freaked out. In case I am taxed on a "large amount," is there any way to approximately figure out what that amount would be due in 2025? I know the IRS will be upfront, but if I am liable for a large tax for this, I would like to prepare now, if only mentally. Would the amounts subject to tax not be retirement funds anymore (.i.e. can I take it out of the IRA and use it)? Secondly, since I won't have a 1099 from Fidelity, will I report the excess removal on 2023 taxes? If so, will I use them amounts from the check they issue? ($2954 + earnings).

3. Can I file my 2023 taxes using software like TaxSlayer? Or would I need to do something else because this is the most complicated tax situation I've ever encountered? I assume I just plug in the differences (for example, not using the H code on the ADP 1099R, etc.) once I get a corrected 1099R and removal goes through via FIdelity?

4. I did an online form with Fidelity for the excess removal that is pending, and Vanguard finally agreed to edit the 1099R (I think in large part because the information you shared with me gave me the correct procedure to ask for). I am hoping that is settled this week so I can file this return.
Alan S.
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by Alan S. »

noodle1 wrote: Mon May 06, 2024 10:02 am 1. Thank you for clearing that up about the transfer. I am learning a lot here. I really appreciate this.

2. In regard to your previous message, Alan S.:
But hopefully, you can avoid any large taxable amounts. Of course, the Fidelity 1099R forms for 2024 transactions will not be issued until January.
This makes me mildly freaked out. In case I am taxed on a "large amount," is there any way to approximately figure out what that amount would be due in 2025? I know the IRS will be upfront, but if I am liable for a large tax for this, I would like to prepare now, if only mentally. Would the amounts subject to tax not be retirement funds anymore (.i.e. can I take it out of the IRA and use it)? Secondly, since I won't have a 1099 from Fidelity, will I report the excess removal on 2023 taxes? If so, will I use them amounts from the check they issue? ($2954 + earnings).

Unless there is some error in the Fidelity return of excess, the only large taxable amount is from the VG 1099R which you are trying to get them to revise correctly. If they don't, use Form 4852 to correct it yourself as discussed. The other taxable income due for 2023 will be the small amount of earnings returned from Fidelity on the return of the 2954. None of these would affect your 2024 return.

3. Can I file my 2023 taxes using software like TaxSlayer? Or would I need to do something else because this is the most complicated tax situation I've ever encountered? I assume I just plug in the differences (for example, not using the H code on the ADP 1099R, etc.) once I get a corrected 1099R and removal goes through via FIdelity?

You might be better served to file a paper return for 2023, as that would allow you to include as many explanatory statements as you need (eg why the H coded 1099R is not be reported as an H coded direct rollover, perhaps why you needed to file a 4852 substitute 1099R if VG refuses to correct, etc. If you file with taxslayer without these explanatory statements, the chance of an IRA inquiry multiplies. Of course, how well your explanatory statements are worded will also be a factor. They should be brief without any unneeded explanations. Your choice here.

4. I did an online form with Fidelity for the excess removal that is pending, and Vanguard finally agreed to edit the 1099R (I think in large part because the information you shared with me gave me the correct procedure to ask for). I am hoping that is settled this week so I can file this return.

Great news. The VG corrected 1099R is the big one. You are on extension so there is no rush to file before all the open issues are resolved. It also gives you time to review the 5498 forms for 2023, which must be mailed by 6/1. For example, you rolled over most of this to a Roth IRA in 2023, so the Roth should issue a 2023 5498 showing a rollover contribution of the amount contributed. You will also get a 5498 for the rollovers made to TIRAs that were excess contributions and removed, but the corrective 1099Rs forms (codes 1,8 or 1,P for removals done in 2024 for 2023) will offset those 5498 forms. As long as the 5498 forms are consistent with your returns, you do not have to mention them.
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noodle1
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

Thank you, again, Alan S. I may return to ask how to properly word things, but paper form sounds best.

I took a look at the 5498's Vanguard released (they are working on a 1099R supposedly, as is Fidelity who is still working on the excess removal, I need to call again to follow up later this week) and the amounts make me think I need to ask for revision, but don't know how to word it.

The VG Roth 5498 states that the rollover amount is $28k (the distribution amount that never actually ended up in a Roth here, but they must have confirmed it was Roth from ADP?) and on the Trad it says $68k (which is both amounts, total). Fidelity does not have this information, unfortunately. The Traditional at Fidelity has a rollover of the $2.5k amount + a correct direct rollover from a $500 check (approx.) and nothing in the Roth.

Can I show Fidelity the paper trail here? I have a feeling I need to ask for this to be corrected, but is there something specific to ask for?

Is there a form I can use to edit this myself (similar to the 4852 to edit if they will not)?
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by Alan S. »

noodle1 wrote: Mon May 13, 2024 2:07 pm Thank you, again, Alan S. I may return to ask how to properly word things, but paper form sounds best.

I took a look at the 5498's Vanguard released (they are working on a 1099R supposedly, as is Fidelity who is still working on the excess removal, I need to call again to follow up later this week) and the amounts make me think I need to ask for revision, but don't know how to word it.

The VG Roth 5498 states that the rollover amount is $28k (the distribution amount that never actually ended up in a Roth here, but they must have confirmed it was Roth from ADP?) and on the Trad it says $68k (which is both amounts, total). Fidelity does not have this information, unfortunately. The Traditional at Fidelity has a rollover of the $2.5k amount + a correct direct rollover from a $500 check (approx.) and nothing in the Roth.

Can I show Fidelity the paper trail here? I have a feeling I need to ask for this to be corrected, but is there something specific to ask for?

Is there a form I can use to edit this myself (similar to the 4852 to edit if they will not)?
These 5498 forms appear to match up with your descriptions of the 2023 transactions:

1) VG 28k Roth rollover reflects the rollover of the Roth 401k funds after you removed them from the TIRA as an excess contribution. The TIRA 68k rollover contribution includes the incorrect Roth amounts included in error. Your removal of that excess as reflected in the incorrect 1099R coded 1,8 will not result in any change in the TIRA 5498. Once a contribution is made, even if it's a disallowed excess contribution, it must be reported on a 5498 as it occurred, but the 1099R will indicate that a correction was made.

2) For Fidelity, I think you directly transferred both Roth and TIRA balances from VG to Fidelity. Direct transfers are not reported on either a 1099R from VG or a 5498 from Fidelity. However, you apparently did a 60 day rollover to the Fidelity TIRA which was an excess contribution that you are having them correct. As is the situation with VG, even if that contribution to Fidelity was an excess contribution, the 5498 is correct. If Fidelity removes the excess portion this year, you will get a 1099R from them in January which reports a corrective distribution of a 2023 excess contribution.

Your 2023 return with explanatory statements should match up to the paper trail from these forms, but of course the final Fidelity 1099R coded 1,8 will not be issued until next January. Therefore, the 5498 forms you have do not require any action as they just corroborate the transactions that you needed to correct.
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noodle1
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Re: 401K roth to traditional IRA Rollover mistakes: how to fix?

Post by noodle1 »

Alan S. : Whew! That makes sense. I'm glad those number seem to add up. I am questioning every step now that I see how easily things can get messed up.

Vanguard sent the 5498. The form has $26589 in Line 2 "rollover contributions" (or is it box?) and also line 7 "plan type" says ROTH. Everything else appears blank. Is this correct? I was expecting a similar looking form to the 1099R where the taxable amount was no longer the $26k but instead the earnings (which I think you suggested were about $28). Can I proceed with my tax return now that I have this? Or should I also do my own 5498 with the corrections we discussed on this forum?

Fidelity claims to need to double check a few things before they will remove the excess. It is a busy season with end of school year things, so I will have more time to hound them in the coming weeks. Do I need to have this excess removed before filing as well? (I assume the answer is yes).

Thank you again. Extremely grateful for this help.
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