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Retirement tax questions
It depends
For Roth IRAs, you can always withdraw post-tax contributions (also known as "basis") from your Roth IRA without penalty.
When you get to the screen that titled "Enter Prior Year Roth IRA contributions", make sure you are entering the total amount of all your previous Roth contributions. (see screenshot) So if you contributed $20,000 to your Roth IRA in prior years, you will put $20,000 in the amount box on this screen.
You can always withdraw contributions (but not earnings) that you made to your Roth IRA tax and penalty free at anytime. Additionally, the Ordering rules for withdrawals from a Roth IRA are: first from regular contributions, then from Conversion and rollover contributions, on a first-in, first-out basis and finally from Earnings on contributions.
Please note: A qualified distribution from a Roth IRA is tax-free and penalty-free, provided that the five-year aging requirement has been satisfied and one of the following conditions is met:
- Over age 59½
- Death or disability
- Qualified first-time home purchase
A non-qualified distribution is subject to taxation of earnings and a 10% additional tax unless an exception applies. For Roth IRAs, you can always remove post-tax penalty contributions (also known as "basis") from your Roth IRA without penalty.
When you are entering this information into TurboTax, your Form 1099-R, box 7 codes J, Q and T identifies a Roth IRA distribution and determines the tax treatment. If you have a J or a Q, the distribution is considered taxable unless there is an exception. TurboTax will guide you on all the exceptions.
Please refer to this IRS link for more information about Roth IRAs:
https://www.irs.gov/publications/p590b/ch02.html#en_US_2015_publink1000231071
To enter your 1099- R in TurboTax Online or Desktop (you may need to upgrade to report these distributions), please follow these steps:
- Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
- Next click on “Wages and Income” ("Personal Income" in TurboTax Home & Business)
- Next click on "jump to full list" or “I’ll choose what I work on”
- Scroll down the screen until to come to the section “Retirement Plans and Social Security”
- Choose "show more", then IRA, 401(k),Pension Plans (1099-R) and follow the onscreen instructions
Please note that all distributions will be reported on your tax return (whether or not they are taxable) on Form 1040 on line 15(a) (or 16(a) but only the taxable portion will show on your return as taxable on line 15(b) (or 16(b)).
To preview 1040:
- Sign into https://myturbotax.intuit.com/
- Under Tax Timeline, click on Continue your return
- Go to "My Account" > "Tools"
- Under the Tools Center, select "view tax summary"
- Select "Preview my 1040"