I contributed to a Roth IRA in 2016, then later in the year I needed to purchase my first home. My understanding was I could use that amount without penalty.

bestsportnascar · ‎June 1, 2019

I do not see a way to enter contributions from the current year when going through the 1099r. I deposited $2,000 in March, then in September came around, I withdrew $1,500 for purchasing the home. It seems to be penalizing me even though the amount withdrew is less than the contributions.

dmertz · ‎June 1, 2019

There is no need to apply the first-home exception since you can always make a distribution of your original contributions tax and penalty free.

In step-by-step mode, TurboTax asks about your Roth IRA distribution before asking about your Roth IRA contribution, so it temporarily calculates tax and penalty until you complete the rest of your tax return.

If your contribution in March 2016 was for the 2015 tax year, be sure to click the Continue button on the Your 1099-R Entries page and enter the $2,000 as the amount of your contributions made for years prior to 2016.

If your contribution in March 2016 was for the 2016 tax year, once you enter your $2,000 Roth IRA contribution later under Deductions & Credits, the tax and penalty for the Roth IRA distribution will disappear as a result of a $0 taxable amount being calculated on Part III of Form 8606.

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bestsportnascar · ‎June 1, 2019

Thank you dmertz! That was very helpful. I didn't realize the entry came later.

I contributed to a Roth IRA in 2016, then later in the year I needed to purchase my first home. My understanding was I could use that amount without penalty.

Retirement tax questions

Retirement tax questions