I withdrew $7,000 from my Roth IRA. The initial contribution was $10,000. I should not be paying taxes on this withdrawal, but my Federal Return is calculating it. Help?

Forum|Forum|2 years ago
February 29, 2024
3 replies
6 views

The PA State Return asked for my Basis of Retirement, which was more than I withdrew from my Roth IRA, and it did not calculate taxes on this withdrawal. Why isn't the Federal Return asking this question?

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JohnB5677

Level 15

If this was a full distribution, you may be able to take a loss on your ROTH IRA. The IRS will only allow you to deduct your losses is to close your Roth IRA accounts.

Please see the TurboTax article: Are Losses on a Roth IRA Tax Deductible?

I want to be sure of two things regarding your Federal taxes.

On your 1099-R, what is the code in Box 7, it should be a B
Did you check the box that says IRA/SEP/SIMPLE

Please contact us again with any questions, and provide some additional details.

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andria-halidyAuthor

Level 2

Distribution Code J is in box 7, and IRA/SEP/SIMPLE is not checked. However, I confirmed with my financial advisor that I should NOT be paying taxes. He indicated that code J is a default code often mis-utilized. I appreciate your feedback!