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Get your taxes done using TurboTax
Please see below for the answers to your questions:
- Yes, you do need to report the gain. The tax you had withheld was just a prepayment, similar to the federal tax withheld on your paycheck.
- Yes, this is the correct method. You'll first input the 1099-R you actually received, based on how it was reported to you (the 6.5k conversion in February 24). Next, you'll create one mock 1099-R to report the withdrawal on the accidental Roth contribution (NOT the rollover done in 2025- that will be properly reported in 2025). In box 1, report the total of the earnings and contribution, $10k, and in Box 2, the earnings, $3k. When you enter this in TurboTax, be sure to indicate the year on the form is 2025.
- No, do not report that you contributed to a Roth IRA in 2024. You removed the contribution and are paying tax on the earning separately, in step 2 above.
March 12, 2025
11:49 AM