When you close your IRA accounts and withdraw the proceeds, you will receive a form 1099-R for each IRA.
If the accounts are Traditional IRAs, the withdrawals are taxable.
If they are Roth IRAs, the withdrawals aren't taxable, provided the Roth IRA is at least 5 years old.
You have to report the withdrawals by entering the forms 1099-R on your tax return.
In TurboTax Online, you can enter your form 1099-R by following these steps:
- Open your tax return
- Click Federal in the left-hand column then on Wages & Income
- Locate the section Retirement Plans and Social Security and click on the down arrow on the right
- Click Start next to IRA, 401(k), Pension Plan Withdrawals (1099-R)
- Follow the TurboTax interview after entering the form 1099-R