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How do I avoid paying additional tax for converting from Traditional to Roth IRA if rollover from pretax 401K to Tra IRA occurred after the conversion both in 2017?
Last year, I converted traditional to Roth IRA which resulted in a 0 balance on my traditional IRA account. I then did a rollover of my pre-tax 401K fund to Traditional IRA to keep things clean.
For the conversion to Roth, I thought I only owe tax on capital gains since all my contribution to Traditional IRA was nondeductible. However for some reason, TurboTax is using some of the rollover amount to calculate the tax owed. The tax owe amount goes up whenever I enter the Dec 31 2017 Traditional IRA balance (which is the rollover amount). If I put in 0, then the correct tax amount owed is displayed. How do I correct this or am I not doing this right? Thank you.
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‎June 6, 2019
9:36 AM