1st time Roth Conversion, need help pls

Forum|Forum|3 years ago
February 18, 2023
2 replies
13 views

I have always used Turbotax and our situation has always been straight forward. In 2022 we did a Roth conversion and things have gotten complicated. I uploaded my documents through Fidelity (1099-R). On the next screen, "Rollover of 401k to Roth 401k", I answered yes to the question question "this money rolled over to a designated Roth 401K", nothing else was asked about the conversion and Form 8606 wasn't generated. Do I now need to list the conversion as a new Roth contribution for 2022? When I try to do that, Turbotax tells me I've overfunded the Roth. Help - what am I doing wrong? TIA

Best answer by DanaB27

Yes, the box for IRA/SEP/Simple should be unchecked in your situation. Yes, no Form 8606. It seems you have answered the follow-up questions correctly to enter the conversion.

DanaB27

Level 15

To verify, was this a work retirement account (401k) to Roth IRA conversion? Please be aware that Form 8606 is only created when the funds are moved from a traditional IRA to Roth IRA (conversion). If this was indeed a conversion from a traditional IRA to Roth IRA then please verify that the IRA/SEP/SIMPLE box is checked with your Form 1099-R entry.

No, you do not enter a Roth IRA contribution when you made a conversion. You only enter direct contributions.

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sgincoAuthor

Level 2

@DanaB27

Thanks for the response. The Roth conversion was made from a Self Employed 401K, not an IRA (sorry, about the error in the original post) so per your post the box for IRA/SEP/Simple would be (and is) unchecked. Therefore, no form 8606, do I understand correctly? And, no other entry other than the uploaded 1099-R needs to be made for the conversion?

DanaB27Answer

Level 15

Yes, the box for IRA/SEP/Simple should be unchecked in your situation. Yes, no Form 8606. It seems you have answered the follow-up questions correctly to enter the conversion.

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dmertz

Level 15

@sginco , you seem to be describing an In-Plan Roth Rollover, not a Roth conversion. An IRR is a taxable rollover from the traditional account in a 401(k) plan to the designated Roth account in the same 401(k) plan. This is reported on Form 1099-R with the gross amount in box 1, the taxable amount in box 2a, any after-tax basis in box 5, code G in box 7 and the IRS/SEP/SIMPLE box not marked.

If this was truly a Roth conversion from an IRA, the Form 1099-R would be different and would have the IRS/SEP/SIMPLE box marked. However, since you imported your 1099-R from Fidelity, it seems likely that this is indeed an IRR as described above.

It's also possible for do a direct rollover from a traditional account in a 401(k) to a Roth IRA. The Form 1099-R would be the same as for the IRR case, but you would indicate that the rollover went to a Roth IRA (the second question) instead of indicating that the rollover went to the designated Roth account in the plan (the first question).