To enter this correctly in TT Premier Online, it must be split into two separate 1099-Rs, one for the rollover to the traditional IRA and one for the conversion to a Roth. As long as the total and distribution codes match, this will not cause a problem:
- Go to Federal > Wages & Income > Retirement Plans & Social Security > IRA, 401(k), Pension Plan Withdrawals (1099-R) and click Start / Revisit.
- Add your 1099-R with all the information the same, except the distribution exactly as it is reported to you. If you have a taxable amount in Box 2a, include that on the Roth conversion. If taxable amount not determined is checked, it is okay to keep that checked for both distributions. Start with the portion that you converted to a traditional IRA.
- Confirm whether or not the IRA/SEP/Simple box is checked.
- After a few more screens, Tell us if you moved the money through a rollover or conversion select I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days) for the portion that you rolled over into a traditional IRA. For the portion converted to a Roth, on the second 1099-R, select
- Confirm the entire amount was rolled over. You should not be taxed on the rollover.
- Repeat with the portion of the distribution that was converted to a Roth IRA. After entering the information and going through the same few screens, select I converted some or all of it to a Roth IRA and confirm you converted the entire amount.
- You will be taxed on the Roth conversion but will not pay the additional penalty for an early withdrawal.
