You are correct, you want to enter it as two separate 1099-Rs. Even though they will not supply you with two, you can still enter it that way in TurboTax, 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. Start with the portion that you converted to a traditional IRA. Do not enter any of the taxable amount on this 1099-R. Keep the Box 7 Code G.
- 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.
- 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. Add the Box 2a taxable amount to this distribution. After entering the information and going through the same few screens, you will get to Did you move the money to a Roth IRA? Select Yes, this money was rolled over to a Roth IRA.
You will be taxed on the Roth conversion but will not pay the additional penalty for an early withdrawal. On your Form 1040, you should see the entire amount from the 1099-R in box 5a and the taxable amount that went into the Roth IRA in box 5b and ROLLOVER indicated. To preview Form 1040:
- Open or continue your return.
- Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
- With the Tax Tools menu open, you can then view your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu
