To report a 401(k) rollover to a Roth IRA on your taxes, put the gross distribution from Box 1 of Form 1099-R on Line 5a of your Form 1040 and the taxable amount from Box 2a on Line 5b. If the rollover went directly from the 401(k) plan to the Roth IRA custodian, that single entry, driven by the 1099-R, is usually the whole job. Form 8606 enters the picture only if you routed the money through a traditional IRA first. Form 5498, which your Roth custodian files, stays in your records; you do not file it yourself.
The rest comes down to reading the 1099-R correctly, knowing when a second form applies, and handling the tax the conversion creates.
Where the Rollover Goes on Form 1040
Lines 5a and 5b of Form 1040 cover pensions and annuities, which includes distributions from a 401(k).1Internal Revenue Service. 1040 (2025) Instructions Line 5a takes the gross distribution from Box 1 of the 1099-R. Line 5b takes the taxable amount from Box 2a.
For a straight pre-tax 401(k) converted to a Roth IRA, Box 1 and Box 2a match, and both lines carry the same figure. The full converted balance is ordinary income for the year.
If the plan held after-tax contributions, Box 2a will be smaller than Box 1, because you already paid tax on the after-tax portion. Use the Box 2a figure on Line 5b even if it looks low; do not substitute Box 1. Verify the split against your plan records if you contributed after-tax dollars, since errors here either overpay tax or trigger a notice.
One quirk in the instructions: if the entire distribution is taxable and Line 5a and Line 5b would carry the same number, the Form 1040 instructions have you enter the amount on Line 5b only and leave Line 5a blank. Tax software handles that automatically. Check the current instructions if you are filing on paper.
A direct rollover of pre-tax 401(k) money to a traditional IRA (not a Roth) shows a Box 2a of zero, and Line 5b is zero. Never leave the distribution off the return entirely just because no tax is due. The IRS is matching your 1040 against the 1099-R the plan filed, and a missing entry looks like an unreported taxable distribution.
Reading Your 1099-R
Your 401(k) plan administrator sends Form 1099-R by the end of January following the year of the rollover.2Office of the Law Revision Counsel. 26 US Code 6047 – Information Relating to Certain Trusts and Annuity Plans Three boxes drive the reporting.
Box 1 is the gross distribution, the total that left the 401(k) during the year. Box 2a is the taxable amount. Box 7 is the distribution code, which tells the IRS what kind of transaction this was. Code G is a direct rollover. Code H is a direct rollover from a designated Roth account in the plan to a Roth IRA. For an indirect rollover treated as a conversion, Code 2 appears if you are under 59½ and Code 7 if you are 59½ or older.3Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498
Check the code against what actually happened. If the code and the taxable amount tell different stories, contact the plan administrator for a corrected form before filing. Correcting a 1099-R later is far easier than answering an IRS notice built on the wrong one.
When Form 8606 Is Required
Form 8606 Part II handles conversions from a traditional IRA to a Roth IRA, not direct 401(k)-to-Roth rollovers.4Internal Revenue Service. Instructions for Form 8606 – Nondeductible IRAs You need it if the money moved in two steps: 401(k) into a traditional IRA first, then traditional IRA converted to a Roth. In that case, Form 8606 computes the taxable portion of the conversion, which matters if the traditional IRA holds basis from nondeductible contributions.
If the 401(k) plan sent the funds straight to a Roth IRA in a single step, Lines 5a and 5b on the 1040 do the work, and Form 8606 is generally not required.
If you have any nondeductible contributions in traditional, SEP, or SIMPLE IRAs and you did a conversion in the same year, Form 8606 Part I tracks your basis and Part II calculates the taxable share of the conversion.5Internal Revenue Service. Form 8606 – Nondeductible IRAs Skipping the form when required often causes the same basis to be taxed twice, once now and again in a future year, because the IRS has no record of what you already paid tax on.
Form 5498 Confirms the Money Arrived
The Roth IRA custodian files Form 5498 with the IRS. Box 3 shows the conversion amount.6Internal Revenue Service. Form 5498 – IRA Contribution Information Your copy arrives by May 31 of the following year, well after you have already filed. You do not attach it to your return.
Keep it anyway. Paired with the 1099-R, Form 5498 is your proof that the distribution actually landed in a Roth IRA within the allowed window. If the IRS ever questions the rollover, those two documents settle it.
Indirect Rollovers and the 20% Withholding
If the 401(k) paid you instead of sending the money directly to the Roth IRA custodian, the plan was required to withhold 20% for federal taxes before cutting the check.7Office of the Law Revision Counsel. 26 USC 3405 – Special Rules for Pensions, Annuities, and Certain Other Deferred Income To roll over the full original balance, you had to add the withheld 20% back from other funds and deposit the whole amount within 60 days of receipt.8Office of the Law Revision Counsel. 26 USC 402 – Taxability of Beneficiary of Employees Trust Whatever did not make it into the Roth IRA counts as a taxable distribution, with a 10% early withdrawal penalty on top if you are under 59½.9Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
Reporting mechanics: Line 5a still shows the full gross distribution from Box 1. Line 5b shows the taxable amount, which is the full converted amount if it was pre-tax money going into a Roth. The 20% that the plan withheld shows up separately as a payment. It goes on Line 25b of Form 1040 as federal income tax withheld from Form 1099-R. Forget that line and you have effectively paid the withholding without ever getting credit for it.
The IRS example: a $10,000 distribution has $2,000 withheld and $8,000 handed to you. Deposit only the $8,000 into the Roth and do not replace the $2,000, and $8,000 is a nontaxable rollover while $2,000 is a taxable distribution, subject to the 10% penalty if you are under 59½.
If you missed the 60-day deadline for reasons beyond your control, you can self-certify a waiver using the model letter in Revenue Procedure 2020-46. Qualifying grounds include hospitalization, a federally declared disaster, or a financial institution error.10Internal Revenue Service. Accepting Late Rollover Contributions A separate hardship waiver process covers situations that do not fit the self-certification categories.11Internal Revenue Service. Topic No. 413, Rollovers From Retirement Plans
Filing Mistakes That Trigger IRS Notices
The IRS matches your 1040 against the 1099-R the plan filed. Mismatches generate automated notices. The recurring errors:
- Leaving the rollover off the return. Even a direct rollover with no tax owed belongs on Line 5a, with Line 5b at zero. Omission looks like an unreported taxable distribution.
- Putting the Box 1 amount on Line 5b when Box 2a is lower. This happens when the 401(k) held after-tax contributions and the filer ignores the taxable-amount box. The result is overpaid tax.
- Missing the withholding credit on an indirect rollover. Line 5a carries the gross figure, but Line 25b has to carry the 20% that was withheld, or that money never comes back.
- Skipping Form 8606 after a two-step conversion. Without it, the IRS has no basis record, and the same dollars can be taxed again later.
- Overriding tax software. The software usually gets this right when the 1099-R is entered accurately. Manual overrides and skipped entries are where errors originate.
Paying the Tax the Conversion Creates
A pre-tax 401(k) converted to a Roth IRA adds the converted amount to ordinary income for the year. The resulting tax is due by the filing deadline, typically April 15. An extension to file is not an extension to pay.12Internal Revenue Service. When to File Payment can go through IRS Direct Pay, EFTPS, or a check with the return.
If withholding and estimated payments fall short during the year, the IRS may add an underpayment penalty calculated at the federal short-term rate plus three percentage points.13Office of the Law Revision Counsel. 26 USC 6621 – Determination of Rate of Interest That rate is 7% for the first quarter of 2026 and 6% for the second quarter.14Internal Revenue Service. Quarterly Interest Rates
Safe Harbors That Avoid the Penalty
You avoid the underpayment penalty if you meet one of the safe harbors. Pay through withholding and estimated payments at least 100% of the prior year’s tax, or 110% if the prior year’s adjusted gross income exceeded $150,000 ($75,000 if married filing separately).15Office of the Law Revision Counsel. 26 USC 6654 – Failure by Individual to Pay Estimated Income Tax Alternatively, pay at least 90% of the current year’s tax. And if the balance owed after withholding and credits is under $1,000, no penalty applies.16Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty
Timing a Late-Year Conversion
Estimated payments are due April 15, June 15, September 15, and January 15 of the following year. A conversion late in the year does not necessarily require estimated payments for the earlier quarters. Form 2210’s annualized income installment method lets you show that the extra income arrived in a later quarter, which can reduce or eliminate penalties for the earlier ones when there was no reason to prepay.