2010 401k Rollover

Today TaxMama® hears from Tom in the TaxQuips Forum with this issue.  “I rolled over a 401k directly to a Roth IRA in 2010.  I received a 1099 for this, but did not fill out an 8606 when I submitted my 2010 return. The plan was to report half of the taxable amount in 2011 and half in 2012.  Do I need to amend my 2010 return or should I just write in the amounts on line 16B of the 2011 Form 1040, and hope they don’t get too excited about it?” 

 

Gee Thomas,

The IRS doesn’t just shrug off a major missing form like that.  

I really, really hate to tell you this. The ONLY way to get the right to defer the taxes on the rollover to 2011 and 2012 was to file that Form 8606 with a TIMELY FILED 2010 tax return.

If you didn’t include that form last year, I don’t believe you can just amend the 2010 tax return and request the privilege now. You can certainly try and see what IRS does.

Put this year’s tax return on extension and wait for IRS to give you a decision after you file the 2010 amended return with the Form 8606. Read chapter 2 of the 2010 IRS Publication 590 for the rules for that 2010 rollover.

I truly hope you are not faced with all the taxes being due in 2010, along with late payment penalties.

And remember, you can find answers to all kinds of questions about Roth Rollovers and other tax issues, free. Where? Where else? At www.TaxMama.com.

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