Help with 401K and 403B rollover to IRA for 2024 taxes - confused about implications

Recently I spoke with a couple of financial people who gave me completely different advice and now I'm really confused. In December, I met with a financial planner who strongly suggested I rollover my old 401K from BigCorp and my 403B from the university where I taught part-time into a single IRA account. His reasoning was that it would be easier to manage everything in one place rather than having these retirement accounts sitting with employers I haven't worked for in years. It seemed to make sense at the time, so I initiated the rollover process in January. The 401K was around $87,000 and the 403B was about $42,000, so a combined total of approximately $129,000 moved into the new IRA. But today I met with a tax preparer to start getting my 2024 taxes organized early, and she seemed really confused about the rollover. She said something about not being familiar with... I'm worried now that I might have messed up something with my taxes by doing this rollover. Will this affect my 2024 taxes negatively? Did I make a mistake? Anyone have experience with 401K and 403B rollovers to an IRA and how they impact your tax situation?

0 coins

18 comments

Vincent Bimbach

•8M

If you did a direct rollover (where the money went directly from your 401K and 403B to your IRA without you receiving the funds), then you shouldn't have any tax consequences for 2024. This is called a trustee-to-trustee transfer and is the cleanest way to handle rollovers. When you complete your taxes, you'll receive a Form 1099-R from each of your former employers' plans showing the distributions. These forms will have a code in Box 7 - typically code "G" indicates a direct rollover to a qualified plan. You'll need to report these on your tax return, but they won't be counted as taxable income. The only time you'd have tax consequences is if you received the money personally (they cut you a check) and didn't deposit it into the new IRA within 60 days, or if you did a rollover from the same account within the previous 12 months (the once-per-year rollover rule).

0 coins

Vincent Bimbach

•8M

If the check was made payable to you but you endorsed it over to the IRA custodian, it's technically not a direct rollover - it's considered an indirect rollover. However, as long as you deposited the full amount into your IRA within 60 days, you won't have any tax consequences. The difference is that with an indirect rollover, your employer is required to withhold 20% for taxes. If this happened, you would need to make up that 20% from other funds when you deposit into the IRA to avoid taxes and penalties on that portion. Once you file your tax return, you'd get the withheld amount back as a refund.

0 coins

Norah Quay

•8M

After struggling with a similar rollover situation last year, I found a tool called taxr.ai (https://taxr.ai) that was incredibly helpful for making sense of all my retirement account documents. I uploaded my 1099-R forms and it explained exactly what the distribution codes meant and how to report everything correctly on my taxes. The site actually analyzes your tax forms and explains what everything means in plain English. For my rollover, it confirmed I had done a direct trustee-to-trustee transfer and wouldn't have any tax consequences. Saved me from panicking when I saw the large distribution amounts reported on my 1099-Rs!

0 coins

Norah Quay

•8M

It absolutely works with SEP IRAs and Roth conversions. I actually used it to analyze a Roth conversion scenario before making the move. It showed me exactly how much tax I'd owe at my current income level if I converted different amounts. Super helpful for planning. As for accuracy, I was skeptical too initially. But the analysis matched exactly what my tax professional told me, except I got the information instantly instead of waiting for an appointment. The tool is pretty transparent about explaining tax rules and shows IRS references for its explanations. My rollover situation had some complications with previous after-tax contributions, and it handled that correctly too.

0 coins

Leo McDonald

•8M

Wanted to follow up about the taxr.ai site mentioned above. I tried it with my retirement account documents and it was surprisingly helpful. I had a complex situation with multiple rollovers and some Roth conversions, and the tool actually caught something my tax preparer missed about my 403b rollover. It flagged that I had some after-tax contributions in my 403b that should be treated differently during the rollover. This saved me from potentially overpaying taxes! The form analysis feature explained every box on my 1099-R in simple terms. Definitely worth checking out if you're dealing with retirement account moves.

0 coins

Angelina Farar

•8M

I had a similar situation last year with multiple 401ks. The most frustrating part was trying to call the IRS to confirm I was handling the rollovers correctly on my tax return. I spent HOURS on hold and never got through. Then I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in under 15 minutes. I was shocked it actually worked! You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Instead of waiting on hold for hours, they somehow get you in the priority queue and call you when an agent is about to pick up. The IRS agent confirmed that my direct rollovers wouldn't create any tax liability and explained exactly how to report the 1099-Rs on my return. Such a relief to get an official answer straight from the source!

0 coins

Angelina Farar

•8M

It's not auto-dialing - they use some kind of priority access system that businesses and tax professionals use. From what I understand, the IRS has different phone queues, and they're able to get you into the faster one. When an agent is about to pick up, they connect the call to your phone. I was definitely skeptical too! I thought it might be a waste of money, but I was desperate after trying for days to get through. I was honestly surprised when they called me back in about 12 minutes and there was an actual IRS agent on the line. The agent answered all my questions about how to properly report my 401k rollovers on my tax return. Definitely not a scam - they delivered exactly what they promised.

0 coins

Bethany Groves

•8M

I need to eat my words about Claimyr from my comment above. After another frustrating day of trying to reach the IRS about a question on my retirement account rollovers, I decided to try the service out of desperation. I'm shocked to report it actually worked! Got a call back in about 15 minutes with an IRS agent on the line. The agent confirmed that my 401k and 403b rollovers wouldn't create a taxable event as long as they went directly to my IRA. They also explained exactly how the 1099-R forms would look and what codes to expect in Box 7. For anyone struggling with rollover questions and hitting the IRS phone tree wall, this service is legitimate. Never been so happy to be wrong about something!

0 coins

KingKongZilla

•8M

Just make sure you received the 1099-R forms from your previous plan administrators. Each 401k and 403b provider will issue one showing the full amount that was distributed. Box 7 should have a code that indicates it was a direct rollover (usually code G). You'll need to report these on your tax return, but they won't add to your taxable income as long as you rolled them properly to a traditional IRA. If your tax preparer isn't familiar with rollovers, you might want to find someone with more experience in retirement account transfers.

0 coins

KingKongZilla

•8M

Form 8606 is generally not required for direct rollovers between pre-tax retirement accounts like 401k/403b to a Traditional IRA. This form is primarily used to report nondeductible contributions to IRAs and distributions from Roth IRAs or conversions. Since your 1099-Rs show Code G, you'll simply report them on your tax return (usually on lines 4a and 4b of Form 1040), showing the full amount on line 4a but zero on line 4b (taxable amount). This indicates you've reported the distribution but it's not taxable. Your tax software or preparer should handle this correctly when you input the 1099-R information.

0 coins