dmertz
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Retirement tax questions

1.  Since the check has not yet been deposited into your traditional IRA, this rollover will not affect the traditional IRA year-end balance that must be reported on your 2024 Form 8606.

 

2.  Tax withholding can be declined on any Roth conversion from your traditional IRA. You'll then want accommodate that additional tax liability either with tax withholding from other sources or make an estimated tax payment if necessary to avoid an underpayment penalty.  Otherwise you can have taxes withheld from the distribution from the traditional IRA and complete the conversion of that portion indirectly within 60 days.  If you are under age 59½ and do not roll over or convert the portion withheld from the traditional IRA distribution for taxes, you'll have an early-distribution penalty unless you have an exception that applies.

 

3.  Sounds reasonable.

 

If you are over age 59½ at the time or you have no taxes withheld, all of the traditional IRA distributions will be reported on a single Form 1099-R.  If everything is ultimately converted to Roth, you'll simply indicate that when you enter this Form 1099-R into TurboTax.  TurboTax will prepare Form 8606 Parts I and II to calculate the taxable amount by application of your basis in nondeductible traditional IRA contributions and your Roth conversions.

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