Yes, the amounts put in the Roth IRA from a SEP IRA (a conversion) will be included in your taxable income. But amounts put from a SEP IRA to a traditional IRA or returned into the SEP IRA ( a rollover) will not be included in your taxable income. TurboTax is handling this correctly.
The withheld tax from the 1099-R will show on line 25b on Form 1040.
Please ensure that are entering the conversion to the Roth IRA in the correct area:
- Login to your TurboTax Account
- Click on the Search box on the top and type “1099-R”
- Click on “Jump to 1099-R”
- Click "Continue" and enter the information from your 1099-R
- Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA”
Do not enter the money under IRA contributions under Deduction and Credits.
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