Confused about Net Regular Contributions to a Roth IRA

[flyinhigh]

TT is asking me to enter Roth IRA Contributions prior to 2024, but it says to "Report your net regular Roth IRA contributions prior to 2024 and to include only those contributions remaining in your Roth IRA after subtracting any amounts withdrawn".

I contributed $5,000 to my Roth about 20 years ago.  I withdrew $7,000 in 2024.  Am I supposed to subtract the amount withdrawn in 2024 (or only prior years)?  Or, since I withdrew more, in 2024, than I contributed in 2005, does that mean I enter zero for Roth IRA Contributions prior to 2024?  (because there are no *NET* contributions left)

[Opus 17 · Accepted solution]

Correct.  If your lifetime total of Roth IRA contributions was only $5000, and you previously withdrew $7000, then your remaining contributions are zero.

[Edit: I missed here that you are probably preparing your 2024 tax return.  If you did not withdraw anything prior to 2024, then your starting contribution amount for 2024 is $5000.  You started 2024 with $5000 of prior contributions, did not make new contributions, and withdrew $7000.  But, keep in mind the comments below that you need to combine all your Roth IRA accounts for this question.]

However, you need to combine all your Roth IRA contributions at all your accounts.  If you have an account at bank A with $5000 contributions, and an account at bank B with $10,000 of contributions, your current contributions are $15,000.   IRA stands for "Individual retirement arrangement", and you only have one arrangement for yourself, even if you have more than one account as part of that arrangement. 

[dmertz]

Since you received no distributions from your IRAs prior to 2024, enter $5,000 as your net Roth IRA contribution basis.  Your net Roth IRA contributions in 2025 will be zero, which TurboTax will track for you.

[flyinhigh]

Yes, I'm preparing my 2024 taxes and thank you for the helpful reply (I did not know about combining Roth IRA accounts (though I only have one)).

And, yes, I started 2024 with $5,000 of prior contributions and withdrew $7,000.  So, I will enter zero for the *NET* regular Roth IRA contributions prior to 2024 because there are no *NET* (after subtracting the $7,000 withdrawal from the $5,000 of prior contributions) contributions left).

[Opus 17]

---

@flyinhigh wrote:

Yes, I'm preparing my 2024 taxes and thank you for the helpful reply (I did not know about combining Roth IRA accounts (though I only have one)).

And, yes, I started 2024 with $5,000 of prior contributions and withdrew $7,000.  So, I will enter zero for the *NET* regular Roth IRA contributions prior to 2024 because there are no *NET* (after subtracting the $7,000 withdrawal from the $5,000 of prior contributions) contributions left).

---

No, you missed the point.  When preparing your 2024 tax return, the program should be asking separately for 

• prior net contributions (before 2024)
• and then separately ask for 2024 contributions 
• and then ask for 2024 withdrawals (from the 1099-R)

If the program is not clear about the difference between prior contributions and current contributions, that could be re-worded.

If there are $5000 of prior contributions (from 2023 and before), then you need to enter that.  It will affect the taxability of the withdrawal.

(However, it is worth nothing that, since your Roth IRA was opened more than 5 years ago, the prior contribution will only affect your taxes if you are under age 59-1/2.  If you are over age 59-1/2, then your withdrawals are going to be tax-free regardless of the mix of contributions and earnings.)