How do I enter a tax deferred pension lump sum?


When I enter the lump sum payment, it treats it as a taxable event. I have been given the option of rolling over the payout to a self-directed IRA or my employers 401k plan. But I can't figure out how to enter it properly.


dan royer's picture

I believe you would simply add money as a contribution (employer contribution) to your retirement accounts. So don't use the lump sum pension. If this is the current year then you could just add more balance to the existing retirement accounts. But if it's a future year, you could add it as an employer contribution.

The way I've done it in my model is to enter the pension receipt and a contribution to the IRA for the same amount in the same year. The result is no net tax on the pension amount.

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