To report an inherited IRA in TurboTax, follow these steps:
- Federal Taxes: Go to the "Federal Taxes" section.
- Wages & Income: Select "Wages & Income."
- Retirement Plans and Social Security: Scroll down to "Retirement Plans and Social Security."
- IRA, 401(k), Pension Plans (1099-R): Select this option.
You'll need to enter the information from Form 1099-R, which you should have received for the inherited IRA. Make sure to enter the form information exactly as it appears and answer the follow-up questions. The tax treatment of the inherited IRA depends on whether it was inherited from a spouse or a non-spouse.
If you inherited the IRA from a spouse, you have three choices:
- Treat it as your own IRA by designating yourself as the account owner.
- Roll it over into your IRA or a qualified employer plan.
- Treat yourself as a beneficiary rather than treating the IRA as your own.
If you inherited the IRA from a non-spouse, you cannot treat it as your own. You must begin receiving distributions from the IRA under the rules for distributions that apply to beneficiaries.
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