Conversion Traditional IRA to Roth

[punky]

Converted Traditional to Roth.   Distribution code on 1099-R is 7.   Took 12.5 K ( 2.5 K withheld Federal) converted the 10K to Roth (same company).   Got a 5498 showing the conversion amount of 10K.   When I enter the Roth IRA It says I have a 6% penalty. How do I fix this.  I seen people say you have to split the 1099R but not really explaining how to split it. 

[DanaB27]

Do not enter a contribution to the Roth IRA. Please follow these steps to enter the conversion:

1. Login to your TurboTax Account 
2. Click "Federal" from the left side of your screen
3. Scroll down to “Retirement Plans and Social Security” and click “Show more”
4. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan Withdrawals (1099-R)" 
5. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
6. Click "I'll Type it Myself"
7. Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
8. Click "Continue" and enter the information from your 1099-R
9. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
10. Then choose “did a combination of rolling over, converting, or cashing out the money”
11. Enter the amount next to "Amount converted to a Roth IRA account" (10K in your case)
12. Continue through the questions.

[dmertz]

A 6% penalty indicates that you entered an excess regular IRA contribution.  This suggests that you have mistakenly entered the Roth conversion as a new, regular Roth IRA contribution under Deductions & Credits and you need to remove that entry.