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On the page that lists the Forms 1099-R that you've entered, click the Continue button and proceed to where TurboTax asks you to enter your basis in Roth IRA contributions ad conversions. TurboTax will then automatically prepare Form 8606 Part III to calculate the taxable amount of nonqualified Roth IRA distributions (which should be zero in this case).
You need to enter your prior Roth IRA contributions.
After you have entered your form 1099-R, TurboTax will take you back to the summary page titled Your 1099-R Entries.
On that page, click Continue and follow the TurboTax interview until you arrive at the page titled Enter Prior Year Roth IRA Contributions where you can enter the amount of your past contributions.
All of my Roth money is from conversions. The earliest one should be more than enough to cover the amount I want to withdraw right now. Can I just enter that one or do I need to enter all of them. If I don't enter all of them how does TurboxTax decide what to do when I make another withdrawal? How does it keep track of principle that I've already withdrawn vs accumulated gains in the current balance after I have made a partial withdrawal of principle?
Enter them all so that TurboTax will correctly track your basis going forward and will correctly calculate the taxable amounts of future distributions. If the oldest conversion was in 2017 or later and you have not yet reached age 59½, that conversion will not yet have completed the 5-year conversion holding period and the portion of that conversion that was taxable upon conversion will be subject to a recapture of the 10% early-distribution penalty.
If you've already distributed some amount of your conversion basis, you'll need to adjust the amounts that you enter into TurboTax as your conversion basis. Only enter into 2020 TurboTax the amounts of basis that remained in your Roth IRAs at the beginning of 2020.
TurboTax tracks your Roth IRA contribution and conversion basis on its IRA Information Worksheet.
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