Roth 401K

[strongsilence]

I have read that a Plan administrator tracks an employee's tax basis in a Roth 401K.  Is it a good idea to enter the (AA) contributions into LC so that the taxpayer also has a record of contributions, which may be useful in case of a rollover to a Roth IRA?

[sjrcpa]

Where would you enter it besides Box 12 of the W-2?

[strongsilence]

Thanks.

The Adjustments Screen 24. I could input it there. Then the Roth basis is calculated and will appear on the carryforwards of the General Info page.

[Karl]

No, I would not put it in Screen 24 until it's rolled over to a Roth IRA. When the taxpayer rolls it over, the custodian should give them a report of the basis that the taxpayer should give to you.

If you don't get that, I would push the client to request/find it, warning them of their homework (or your bill) to go back through all their W-2s every year if they don't get it.

[rbynaker]

It should be reported in box 5 of the 1099-R when it gets rolled out.  I haven't seen too many of these yet but I just pulled one up from a couple years ago and total contributions was reported in box 5 with a distribution code H.

[strongsilence]

Thanks, karl and thanks rbny. I think the Custodian is to be trusted to track Roth 401k info. Even if they go out of business, I think Erisa requires that they provide participant account information.