You must take out the after-tax contributions incrementally. Turbo tax will ask you for the amount of any nondeductible contributions to your retirement account when you enter the Form 1099-R reporting your retirement plan distributions during the year.
The distribution of your non-taxable contributions will be treated as non-taxable on a pro-rata basis. You cannot simply consider a portion of distributions as a return of the post-tax contributions you made. The non-taxable portion of your distributions will be the post-tax amount contributed divided by the total value of your IRA account balance multiplied by your total distributions for the year. You will have to treat a portion of current and future distributions from your IRA as non-taxable, based on the percentage of non-deductible contributions you made, until you have distributed all of the retirement fund balance. Your broker may or may not determine the non-taxable amount when issuing your form 1099-R at year-end. If the broker does not report it, you are responsible for calculating and reporting the correct amount of non-taxable distributions on your tax return.
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