I uploaded the 1099-R information directly from Vanguard.
Box 1 and Box 2 both reflect $7,000 Box 2b is checked (taxable amount not determined
Box 7 reflects Code 2-Early distribution, exception applies
The result with this uploaded information is that entire $7,000 is being taxed.
Note - Also in box 7 IRA/SEP/Simple is checked.
If I add Code G to the 2nd dropdown area for Box 7, then it does not tax the $7,000.
In the Guide Me section for this 1099-R it asks if this is a rollover to a Roth IRA - If I answer yes, then it tells me that there should be a code 1, 2, or 7 and not a code G. There isn't a code G on the 1099-R but i added it to get the $7,000 taken out of taxable income. I don't know if a conversion (which is what i did) is the same thing as a rollover - so i don't know how to answer this guide me question about rollover to Roth or not a rollover to Roth. So for now i am checking the no, it isn't a rollover into a Roth. When I run TT review, it notes an error that I should remove box 7 code G. I removed it and it once again taxes the $7,000.
There is no Form 8606 created (I thought it was required).
Lastly, I have 2 Forms 5498 from Vanguard for 2024 - the first one notes that I made a Traditional IRA contribution for $7,000 and reflects that amount in box 1. The 2nd 5498 has the $7,000 in box 3 - Roth IRA Conversion. There is nothing in box 2 (Rollover contributions) on either of these forms.
This is frustration and I really don't want to force it out of taxable income by adding code G since there wasn't a code G, but I also don't want to pay tax on $7,000 twice. Any ideas are greatly appreciated!
When i run
TurboTax produces a Roth IRA contribution Limit worksheet if that means anything - says income is too high for a direct contribution to a Roth (ergo the backdoor approach)
However with Code G entered, when I run the TT return review, I get an error stating I need to add a statement to line 4
