Had direct roll over from a Des. Roth a/c to Roth IRA. Later I took early w/d from Roth IRA of $8K. Cost basis in Roth a/c $7k. Is all $8K taxable or less cost basis.

[DS30 · Accepted solution]

You will only pay taxes on the portion of the Roth IRA distribution that is not considered a withdrawal of previously taxed Roth IRA contributions. So if you already paid taxes on $7,000 of your Roth IRA contribution then only $1,000 of your $8,000 Roth IRA distribution will be taxable.

When you get to the screen that titled "Enter Prior Year Roth IRA contributions", make sure you are entering the total amount of all your previous Roth contributions. (see screenshot) So if you contributed $7,000 to your Roth IRA in prior years, you will put $7,000 in the amount box on this screen.

You can always withdraw contributions (but not earnings) that you made to your Roth IRA tax and penalty free at anytime. Additionally, the Ordering rules for withdrawals from a Roth IRA are: first from regular contributions, then from Conversion and rollover contributions, on a first-in, first-out basis and finally from Earnings on contributions.

Please refer to IRS - Roth IRAs - Publication 590 for more information about Roth IRAs.

To enter your 1099- R in TurboTax Online or Desktop (you may need to upgrade to report these distributions), please follow these steps:

1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Wages and Income” ("Personal Income" in TurboTax Home & Business)
3. Next click on "jump to full list" or “I’ll choose what I work on”
4. Scroll down the screen until to come to the section “Retirement Plans and Social Security”
5. Choose "show more", then IRA, 401(k),Pension Plans (1099-R) and follow the onscreen instructions

Please note that all distributions will be reported on your tax return (whether or not they are taxable) on Form 1040 on line 15(a) (or 16(a) but only the taxable portion will show on your return as taxable on line 15(b) (or 16(b)).

To preview 1040:

• Sign into https://myturbotax.intuit.com/
• Under Tax Timeline, click on Continue your return
• Go to "My Account" > "Tools"
• Under the Tools Center, select "view tax summary"
• Select "Preview my 1040"