Retirement tax questions

First, use the following steps to go to your Form 1099-R summary page and click the trash can icon or Delete next to any entries you have made:

• On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
• This opens a box where you can type in “1099-R” and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
• The search results will give you an option to “Jump to 1099-R”
• Click on the blue “Jump to 1099-R” link

Next, you will want to enter the information about your non-deductible contribution to a Traditional IRA.  Here are those steps:

1. Enter “IRA contributions” in the search box located in the upper right corner of the program and initiate the search.
2. Your top search results will be a link to Jump to the section you need.
3. Check the box showing that you contributed to a Traditional IRA.  Remember, that is where you initially put the money.
4. The next screen asks you to verify that you contributed to a Traditional IRA, choose Yes.
5. The next screen asks if the contribution was a repayment of a retirement distribution, choose No.
6. Next, enter the amount that was contributed to the Traditional IRA.
7. The next screen is a little tricky unless you read it carefully.  It is asking if you “recharacterized” the contribution.  This is different from a conversion, so the answer is No.
8. On the next screen (or two), there will be a question about whether you are covered by a retirement plan at work.  Answer according to your situation. 
9. Following that, there will be a question about Excess IRA Contributions.  Answer this according to your situation.
10. Now, we’re at an important step.  The question will be, were there any nondeductible contributions to the IRA.  The answer here is Yes.
11. The next page asks for the basis of the Traditional IRA.  If you have never made nondeductible contributions in the past and kept them in the IRA, your basis is zero.  Otherwise, enter the amount shown as total basis on your most recently filed Form 8606.

That takes care of the first part of the process.  Next, you need to take care of the conversion of the Traditional IRA to the Roth IRA.  When you do this, a Form 1099-R will be issued to report the conversion.  You will simply enter the information from the Form 1099-R into TurboTax using these steps:

1. Enter “1099-R” in the search box located in the upper right corner of the program and initiate the search.
2. Your top search results will be a link to Jump to the section you need.
3. Enter the information exactly as it appears on your Form 1099-R.  Pay special attention to Box 2b, Box 7, and the IRA/SEP/SIMPLE check box.  Click Continue.
4. The next screen is a follow-up question asking whether you inherited the IRA.  Answer No.
5. The next screen asks what you did with the money.  Answer I moved the money to another retirement account.
6. Then, choose I did a combination of rolling over, converting, or cashing out the money to answer the question that appears. 
7. Then enter the amount that was converted to the Roth IRA.
8. Answer any remaining questions that come up.  

One final note, if the Traditional IRA earned any money before it was converted to the Roth IRA, those earnings will be taxable on your return.