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Retirement tax questions
Thank you for your prompt reply.
The 1099-R reported to the IRS reflects a $90K distribution. IF check the box in Turbo Tax that the amount was converted to a Roth IRA, an excess contribution to my Roth IRA results plus a 6% penalty. The subsequent reporting on form 5948 to the IRS after my return is filed would appear to require an amended return to recover any penalties. I would likely have to liquidate the excess 'contribution' (at a loss due to market decline since November) to cure the excess amount issue.
The alternative is to NOT check the box that the $90K was converted to a Roth IRA. The subsequent form 5948 may take care of the conversion penalty and other matters. It is my understanding that since I am declaring the $90K as a taxable event that the conversion is not subject to an 'excess' calculation.
What do you recommend for corrective action?