Form 1099-R Error: IRA converted to Roth IRA

Sky Mile · ‎June 24, 2020

Hi there

- I started a IRA in Dec 2019, and converted to a Roth IRA in the same month, before Dec 31st

- The conversion was for the full balance of ~$6K

- Received a 1099-R from the administrator with relevant info to enter into tax forms

- When entering the information into Turbotax, as soon as I enter the info, my refund evaporates as if it is charging me the $6k being taken out as a distribution

HOWEVER - once completing the entries into Turbotax, I get a definitive message that "I do not owe tax on this money", which makes sense given it was a conversion, not a distribution

But it then makes no sense that Turbotax is still recording it as a distribution and calculating Tax. Once I do the final check on the Federal it also quotes this as a distribution.

Hence it seems like an error somewhere. Anyone got any ideas?

macuser_22 · ‎June 24, 2020

If you made a 2019 non-deductible IRA contribution then that sounds like you failed to enter that contribution in the IRA contributions section as a non-deductible contribution so it would be on line 1 on a 2019 8606 form.

Enter IRA contributions here:
Federal Taxes,
Deductions & Credits,
I’ll choose what I work on (if that screen comes up),
Retirement & Investments,
Traditional & Roth IRA contribution.

OR Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "ira contributions" which will take you to the same place.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

dmertz · ‎June 24, 2020

The message that you are getting from TurboTax says that you are not subject to any "additional" taxes, meaning that you are not subject to the 10% early-distribution penalty (an excise tax). It does not mean that the distribution is not subject to income tax.

If you had any balance in traditional IRAs at the end of 2019, it's pretty certain that at least some of the conversion will be taxable (otherwise you would have just converted your entire traditional IRA balance).

Form 1099-R Error: IRA converted to Roth IRA

Retirement tax questions

Retirement tax questions