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Get your taxes done using TurboTax
First please make sure you enter the Form 1099-R as shown on the Form 1099-R (except enter $0 in box 5 as mentioned above if these $1,000 were moved directly from pension (401k?) to Roth IRA).
But it seems we need to clarify a few things:
It seems that the pension might be moved first to the traditional IRA (then the Form 1099-R mentioned in 1 would be correct and you would not need to enter the $0 in box 5). Then you moved the $6,000 nondeductible traditional IRA contribution plus the $1,000 (that came from the pension) to the Roth IRA. Is this correct?
If yes, then you will enter Form 1099-R for the $1,000 as shown on the form. This part is a nontaxable rollover (Pension to traditional IRA).
Then you will have to enter the nondeductible contribution and the Roth conversion with the steps below.
To enter the nondeductible contribution to the traditional IRA:
- Open your return
- Click “Deductions &Credits” on the top
- Click "I'll choose what to work on"
- Scroll down to “Traditional and Roth IRA Contributions” and click “Start”
- Select “traditional IRA”
- Answer “No” to “Is This a Repayment of a Retirement Distribution?”
- Enter the amount you contributed $6,000
- Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
- Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had nondeductible contributions before this tax year
- Enter your basis in the Traditional IRA from your 2021 Form 8606 line 14 (if you had a basis in the prior year)
- On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).
To enter the 1099-R conversion:
- Click "Federal Taxes" on the top and select "Wages & Income"
- Click "I'll choose what to work on"
- Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)"
- Answer "Yes" to the question "Did You Have Any of These Types of Income?"
- Click "I'll Type it Myself"
- Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
- Click "Continue" and enter the information from your 1099-R
- Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
- Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount of $7,000 next to "Amount converted to a Roth IRA account"
- On the "Your 1099-R Entries" screen click "continue"
- Answer "yes" to "Any nondeductible Contribution to your IRA?" if you had any nondeductible contributions in prior years.
- Answer the questions about the basis from line 14 of your 2021 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs
Once you have completed this (assuming all of your traditional/SEP/ SIMPLE are empty after the conversion) you will have the $1,000 as a taxable amount in line 4b of Form 1040.
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