Roth Distributions

Forum|Forum|21 days ago
September 3, 2026
5 replies
57 views

I had to file for an extension because this problem came up and I couldn’t handle it. I took a distribution from a Roth IRA that has been in existence for over twenty years. The info that was downloaded from my financial company shows a Q code as to type of distribution. After confirming that the account has been in existence for at least five years TurboTax still asks “Did you open any Roth IRA’s in 2024 or any previous year?” Then I’m asked about Roth contributions prior to 2025. Why?? What am I missing?? Was I supposed to keep track of all contributions for over the life of the account? I thought that one the Roth had been established for five years, anything withdrawn was tax free.

TurboTax CD or Download Standard

NCperson

Level 15

The Roth distribution rules can be complex; however here is the simple part of the rule:

if the Roth has been opened for at least 5 calendar years AND you are at least 59.5 years old, any distribution from the Roth is tax free. That the code is a “Q” in box 7 means that your Administrator is reporting that in fact this distribution is tax free.

You thought that once the Roth has been established for 5 years, anything withdrawn is tax free is ONLY TRUE if you are over 59.5 years old.

Even so, most Roth distributions can be tax free because of the IRS rules of distributions:

All contributions are assumed to be distributed first - doesn’t matter what year the contribution first occured. These are all tax free as they were after tax contributions to begin with. Doesn’t matter how long the contributions were in the Roth, the distribution is tax free and there is no 10% penalty, even if you are under 59.5 years old.
All conversion and rollover dollars are distributd next. doesn’t matter what year the conversion first occured. These dollars are also income tax free because the income tax was paid when the conversion / rollover first occured. However, if the conversion occured in the past 5 calendar years and you are under 59.5 years old, the distribution is subject to the 10% penalty (unless another exclusion applies).
All earning are distributed last. if you are under 59.5 years old, these dollars are taxable and subject to the 10% penalty. If you are over 59.5 year old and no Roth account in your name has been opened for at least 5 calendar years, the earnings are subject to income tax, but not the 10% penalty. If you are over 59.5 years old AND the oldest Roth account in your name was opened for at least 5 years, there is no income tax and no 10% penalty.

Were you supposed to keep track of contributions over the life of the account? yes; however, once you turn 59.5 and the oldest Roth account has been opened for at least 5 calendar years, keeping track of the contributions no longer matters - as I detail above, it’s all tax free.

does that help?

noralbAuthor

Level 2

Thank You. To be brief, the Roth account has been in existence for more than twenty years and i am decades older than 59.5 years. TurboTax just won’t let me get past this point. Even after establishing that information and having a “Q” as type of distribution, TT wants more information that I simply don’t have (and shouldn’t need). Am I missing something? It seems that TT just doesn’t know how to handle this correctly.

NCperson

Level 15

TT does ask a lot of questions that are simply not necessary once you are ove 59.5 years old and the Roth has been open for at least 5 years.

Since you are working in the desktop version, you can certainly bypass the questions and it doesn’t report the distribution as taxable. I tried it myself to confirm.

Once you enter the 1099-R, it’s going to ask what you did with the money, just respond “something else” (because you didn’t roll it to another IRA). From there forward, just bypass all the prompts and just continue to hit “continue”. Nothing is going to be taxable because of that “Q” in Box 7.

The roth distribution will be reported in Box 4a of form 1040, but will not be part of box 4b.

does that help?

NCperson

Level 15

separately, the extension only defered the deadline to submit the tax return. it did not defer the date the money was due - that remained April 15 and interest has been ticking on any balance due, even if you do not determine what that balance due is until October 15.

Many misunderstand that. The IRS is more focused on ireceiving ts money timely than ireceiving its paperwork.

noralbAuthor

Level 2

I filed for an extension because TurboTax had me trapped in the above described situation. I made sure that I would be covered so far as any tax that would be due by sending estimated tax payments.