DaveF1006
Expert Alumni

Retirement tax questions

It depends. It sounds like you made taxable distributions for the year. Tax law requires that the basis in the IRA must be pro-rated between the 2024 distribution(s) and the remaining IRA value which is the aggregate total of all existing Traditional, SEP and SIMPLE IRA accounts on Dec 31, 2024.

 

You can NEVER withdraw ONLY the nondeductible part - it must be prorated over the entire value of ALL Traditional IRA accounts which include SEP and SIMPLE IRA's. (For tax purposes you only have ONE Traditional IRA which can be split between as many different accounts as you want, but for tax purposes they are all added together).

 

TurboTax will ask for your non-deductible "basis" and then the *Total Value* of *all* Traditional IRA, SEP and SIMPLE accounts as of Dec 31, of the tax year. That is so the prorating of the basis can be properly proportioned between the current years distribution and the remaining IRA value. That is done on the 8606 form.

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