How to report a Reverse rollover from IRA to 401K on my taxes?

A reverse rollover from an IRA to a 401(k) is non-taxable as long as it was done correctly as a direct trustee-to-trustee transfer. However, you'll still need to report it on your tax return. You should receive a Form 1099-R from your IRA custodian showing the distribution from your IRA. This form will typically have distribution code G in Box 7, indicating a direct rollover to a qualified plan. On your tax return, you'll report this on Form 1040 and potentially Form 8606 if any non-deductible contributions were involved. The key is making sure the 1099-R properly shows it was a direct rollover. This prevents the IRS from thinking you took a distribution. Your 401(k) plan won't issue any tax forms for receiving the money since they're just accepting the funds.

I went through this exact headache last year when preparing for a backdoor Roth! After spending hours trying to figure it out, I eventually found this amazing tool called taxr.ai (https://taxr.ai) that helped me sort through all my retirement account transactions. It analyzed my 1099-R and other tax docs, then showed me exactly how to report my reverse rollover. What I really liked is that it explained the specific tax codes and which forms I needed to use - saved me from going back and forth with my accountant who was charging me by the hour! The system even flagged that my 1099-R had the wrong distribution code and helped me get it corrected before filing.

Just wanted to update after trying taxr.ai that someone mentioned above. This thing is legit! I uploaded my 1099-R from my IRA custodian and it immediately identified that I had done a reverse rollover. It showed me exactly where to report it on Form 1040 and explained why it wouldn't be taxable. It even caught that I had some non-deductible contributions in my IRA that I had forgotten about from years ago (had to dig up old Form 8606s), which slightly changed how I needed to report things. Finished my taxes yesterday and everything reconciled perfectly. Definitely recommend for anyone doing retirement account rollovers or conversions.

After struggling to get through to the IRS about a similar rollover question last year (kept getting disconnected after waiting for 2+ hours), I discovered Claimyr (https://claimyr.com). They actually got me connected to a real IRS agent in about 20 minutes who answered all my rollover reporting questions. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - basically they navigate the IRS phone tree for you and call you back when they have an agent on the line. Saved me so much frustration when I needed official clarification about how to report my retirement account transfers!

I take back what I said about Claimyr. After my frustration peaked trying to get an answer about my reverse rollover, I gave it a shot. To my complete shock, I got connected with an IRS rep in about 25 minutes - after trying for WEEKS on my own with no success. The agent confirmed that for my reverse rollover, I needed to report the 1099-R on my return using the code in Box 7, but that I wouldn't owe any taxes as long as the full amount went directly into my 401k. She even explained that I needed to file Form 8606 because I had some non-deductible contributions in my IRA mix. Would have filed wrong without this clarification. Sometimes you have to admit when you're wrong, and I was definitely wrong about this service.

My accountant charged me $175 to figure this out for my taxes last year. The key part he explained is that the IRA custodian sending the money will issue a 1099-R, but the 401k receiving the money won't generate any tax form. Your 1099-R should have code G in Box 7 showing it was a direct rollover to a qualified plan. If the 1099-R has a different code, you might need to contact the IRA custodian to get it corrected. For my situation, they initially coded it as code 1 (early distribution) which would have triggered penalties!

Dont forget to consider the pro-rata rule if you have both pre-tax and after-tax money in your IRA's. Thats the whole point of the reverse rollover strategy - to get the pre-tax money out of your IRA's so you can do a clean backdoor Roth contribution without triggering pro-rata calculations.

Great question about reverse rollovers! Just to add some clarity to the excellent advice already given - when you do a reverse rollover from IRA to 401(k), you're essentially moving money from one pre-tax retirement account to another, so there's no immediate tax consequence. However, reporting is still required. You'll receive Form 1099-R from your IRA custodian showing the distribution. The key is making sure Box 7 shows the correct distribution code (should be "G" for direct rollover to qualified plan). You'll report this on your Form 1040, and if you had any non-deductible contributions in your IRA, you'll also need Form 8606. The good news is that your strategy worked perfectly - by clearing out the pre-tax IRA money, you've eliminated the pro-rata rule complications for your backdoor Roth conversion. Just make sure all your tax forms reflect the transactions correctly, and you should be all set!