dmertz
Level 15

Retirement tax questions

You have uncovered a bug in TurboTax.  TurboTax is not including on Form 8606 line 24 your basis in 2019 conversions nontaxable at conversion.  My investigation shows that this bug was introduced in 2018 TurboTax; 2017 TurboTax works properly.

 

When you entered the Form 1099-R for the portion rolled over to the Roth IRA, the Form 1099-R on which you included the nontaxable amount in boxes 1 and 5, then indicated that you rolled the money over to a Roth IRA (not to a Roth 401(k) or 403(b)), TurboTax should have added the box 5 amount to your basis in Roth IRA contributions.  Be sure that after answered the question following the rollover to Roth IRA question that Yes, you made after-tax contributions to the 401(k) or 403(b) plan and that the box 5 amount appears as the amount of your after-tax contributions.  This amount should then be included on lines 60 and 7 of the IRA Information Worksheet to be used in preparing Form 8606 Part III to determine the taxable amount of your code J Roth IRA distribution.  TurboTax should be including on Form 8606 line 24 the amount from line 7 of the IRA Information Worksheet, but it does not.  TurboTax seems to be unnecessarily separately determining, incorrectly, the amount to include on Form 8606 line 24.

 

As a workaround, in the questions that follow entering the Form 1099-R for the rollover to the Roth IRA, instead of indicating that you rolled the money over to a Roth IRA, indicate that you rolled the money over to a Roth 401(k).  This will remove the entry from line 60 of the IRA Information worksheet.  Then click the Continue button on the Your 1099-R Entries page, proceed and answer Yes when TurboTax asks if you did Roth conversions before 2019 (even though you might did not have), indicate that you did a Roth conversion in 2018, then enter the box 5 amount from the Form 1099-R as 2018 Nontaxable conversions.  This will cause TurboTax to include the box 5 amount on Form 8606 line 24.