Please, be aware that conversions from a traditional IRA (pre-tax contributions) to a Roth IRA (after-tax contributions) is included in your taxable income unless you had and tracked nondeductible contributions (this basis is tracked on Form 8606).
The reason for this is distributions from a traditional IRA are taxable but qualified distributions from a Roth are not taxable. Also contributions you made to your Roth IRA can be withdrawn anytime, tax- and penalty-free.
- Click on "Search" on the top right and type “1099-R”
- Click on “Jump to 1099-R” and enter the information from your 1099-R
- Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
- Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount next to "Amount converted to a Roth IRA account"
If you had a basis in your traditional IRA then please make sure you enter this when going through the follow-up questions after entering your 1099-R:
- Answer "yes" to "Any nondeductible Contribution to your IRA?"
- Answer the questions about the basis
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