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Thrift Savings Rollover to ROTH
I took a distribution from my TSP and sent much of it [far greater than annual maximum] to a previously established ROTH IRA without going broker to broker, but within 60 days. Other than listing it as a ROTH conversion on the 1009R entry screen, is there something else I need to do so the eventual ROTH withdrawal will be free from tax & query?
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Get your taxes done using TurboTax
Technically, a IRA conversion is from a non-Roth IRA account into a Roth IRA account, often with a taxable impact. Because it was a TSP, it can be treated as a rollover and this amount will be added to your taxable income for the year. Since it is a rollover, the annual limit for contributions do not apply.
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Thanx, MaryK. I'm paying the taxes this year on it.... Ouch now, less ouch later. Just want to be covered a few years down the line when I attempt to withdraw it tax-free. Is there a form or an entry in TT that I will need or use should there be questions? My brokers inferred they would mark something on the 2020 1099R if it were broker to broker. I suppose I can just make a note of it a see what happens. Just don't want to miss the checkmark that TT provided....if there is one.
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Yes, TurboTax will ask you in the interview the questions needed to calculate the tax, indicate the rollover- this will also adjust the amount of penalty for early withdrawal. Your 1099-R should have a Box 7 Code 1. Please post again if you have questions while entering!
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After further review, code 1 in Box 7 is for early withdrawal. My transfer was not - I'm 60+ I will use the "Supporting Details" option in the forms view to indicate that the conversion was legal. I don't expect there to be an issue, just trying to record it correctly.
Thanx for the help.