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How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

turbotax online version not showing the Forms (1040/8606/540x) to enter the details directly.
Got below message:
Income Too High To Deduct an IRA Contribution

Ashok's modified adjusted gross income (MAGI) is $x,
 which puts Ashok over the limit for IRA deductions. To deduct a contribution, you can't have a MAGI of over $x while being covered by a retirement plan at work.
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2 Best answer

Accepted Solutions
AndreaG
New Member

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

To report the Traditional IRA distribution and the conversion contribution:

  • log in to your Turbo Tax account
  • click on "take me to my return"
  • click on the "federal taxes" tab
  • click on "wages and income"
  • choose "show more and "see list of all income"
  • scroll down to "retirement plans and social security"
  • click on "start" next to "IRAs, 401(k), etc"
  • enter the information for your 1099R
  • Turbo Tax will ask you questions about your Traditional IRA distribution
  • When you reach the screen that says, "what did you do with the money?", choose the option that says, "I moved the money to another retirement account"
  • After you choose this option, another set of options will appear:
  • If you converted the entire distribution to a Roth IRA, choose "I converted all of this money to a Roth IRA"
  • If you only converted some of the distribution to a Roth IRA, choose, "I did a combination of rolling over, converting, and cashing out the money." If you choose this option, Turbo Tax will ask you to identify how much of the distribution was converted to a Roth IRA, and how much of the distribution was rolled over into another retirement plan.
  • Next you will the screen that says, "your 1099R entries". Scroll down to the bottom of the page and click "continue". Turbo Tax will ask you more questions and you will need your 5498 Form for your Traditional IRA. A year end statement might also provide the necessary information. 

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dmertz
Level 15
Intuit Approved! This answer has been verified for accuracy by an Intuit expert employee

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

@ryanstan , you have two separate transactions to report with a Form 1099-R for each.  The Form 1099-R from the 457(b), probably with code G, reports the rollover from the 457(b) to the traditional IRA.  Indicate that you did not roll it over to any kind of Roth account.

 

I assume that the Roth conversion from the traditional IRA to a Roth IRA occurred in 2022, so this is required to have been reported on a From 1099-R issued by the IRA custodian, probably with code 2 or code 7, and it will have the IRA/SEP/SIMPLE box marked.  (If the conversion was done in 2023, it's reportable instead on your 2023 tax return when you receive the 2023 Form 1099-R next year.)  When entering the Form 1099-R, you'll indicate the amount converted.

 

All versions of TurboTax support reporting these two transactions.

View solution in original post

106 Replies
AndreaG
New Member

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

To report the Traditional IRA distribution and the conversion contribution:

  • log in to your Turbo Tax account
  • click on "take me to my return"
  • click on the "federal taxes" tab
  • click on "wages and income"
  • choose "show more and "see list of all income"
  • scroll down to "retirement plans and social security"
  • click on "start" next to "IRAs, 401(k), etc"
  • enter the information for your 1099R
  • Turbo Tax will ask you questions about your Traditional IRA distribution
  • When you reach the screen that says, "what did you do with the money?", choose the option that says, "I moved the money to another retirement account"
  • After you choose this option, another set of options will appear:
  • If you converted the entire distribution to a Roth IRA, choose "I converted all of this money to a Roth IRA"
  • If you only converted some of the distribution to a Roth IRA, choose, "I did a combination of rolling over, converting, and cashing out the money." If you choose this option, Turbo Tax will ask you to identify how much of the distribution was converted to a Roth IRA, and how much of the distribution was rolled over into another retirement plan.
  • Next you will the screen that says, "your 1099R entries". Scroll down to the bottom of the page and click "continue". Turbo Tax will ask you more questions and you will need your 5498 Form for your Traditional IRA. A year end statement might also provide the necessary information. 
bartzumbari
Returning Member

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

I'm using Turbotax Premier and I converted my IRA to a Roth--I do this every year.  I put money in an IRA.  Then immediately convert it to a Roth IRA.  So there's no taxable income.  Everything is going fine, turbo tax even says I won't have to pay taxes on this distribution.  But my Federal tax due reflects a payment due.  I feel this must be a bug in Turbo tax this year (I've never had this problem before).  Any clues?

KrisD15
Employee Tax Expert

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

Is this the only transaction you reported? No wages or other income? 

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reenu
New Member

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

How is there no taxable income?  Any conversion will result in taxable income.

DaveF1006
Employee Tax Expert

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

Yes this should be a taxable event. Let's try these steps to see if you reported correctly.

  1. You have entered your 1099R. make sure there is a taxable amount listed in Box 2A
  2. Make sure the IRA box is checked between Box 7 and 8 in your form
  3. Answer the question on the next screen and continue
  4. the 4th question should ask Let us know about the distribution.  Select Traditional IRA
  5. Then move through the next question about inheriting and then the next screen will ask, what you did with the money.
  6. Indicate you rolled it over into another retirement account
  7. Then another drop down will appear. Here you will say you converted to a Roth
  8. Finish up the questions.  That distribution should now as taxable on 1040-4B
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How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

I'm having the same issue. 

 

1) I put post-tax money in a non-deductible IRA 

2) I immediately rolled it over to a Roth 

3) I received a 1099-R for the traditional IRA distribution 

4) Add the 1099-R to Turbo Tax. My tax obligation increases 

5) I answer the question that the distribution was to a Roth conversion 

6) The tax obligation does not go away 

 

You should not have to pay tax on a non-deductible IRA to Roth conversion so why is it trying to tax me? 

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

Nevermind I just realized it's because I hadn't yet added the $6,000 non-deductible IRA contribution in another section. Once I added that the tax obligation went away. 

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?


@ashleyblewis wrote:

I'm having the same issue. 

 

1) I put post-tax money in a non-deductible IRA 

2) I immediately rolled it over to a Roth 

3) I received a 1099-R for the traditional IRA distribution 

4) Add the 1099-R to Turbo Tax. My tax obligation increases 

5) I answer the question that the distribution was to a Roth conversion 

6) The tax obligation does not go away 

 

You should not have to pay tax on a non-deductible IRA to Roth conversion so why is it trying to tax me? 


In step 1 did you enter that into the IRA contribution section and specify that is to be non-deductible?

 

Enter IRA contributions here:
Federal Taxes,
Deductions & Credits,
I’ll choose what I work on (if that screen comes up),
Retirement & Investments,
Traditional & Roth IRA contribution.

OR  Use the "Tools" menu  (if online version under My Account) and then "Search Topics" for "ira contributions" which will take you to the same place.

 

Enter a 1099-R here:

Federal Taxes,
Wages & Income
(I'll choose what I work on - if that screen comes up)
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR Use the "Tools" menu (if online version left side) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

You will be asked of you had and tracked non-deductible contributions - say yes. The enter the amount from the last filed 8606 form line 14 if it did not transfer. Then enter the total value of any Traditional, SEP and SIMPLE IRA accounts that existed on December 31, 2019.

That will produce a new 8606 form with the taxable amount calculated on lines 6-15 and the remaining carry-forward basis on line 14.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
dmertz
Level 15

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

ashleyblewis, was the traditional IRA contribution made for 2018 or for 2019?  If it was for 2018, did your 2018 tax return include the Form 8606 required to report a nondeductible traditional IRA contribution?

 

Did you have any money in traditional IRAs on December 31, 2019?

 

There is no such thing as a "nondeductible IRA," only basis in nondeductible contributions that apply to your traditional IRAs in aggregate.

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

Strange I replied but it's not showing up so trying this again...

 

@macuser_22 - Thank you! I followed your steps and I think I got it figured out. I hadn't added the IRA contribution yet and once I did it decremented my tax obligation (after having increased it when I added the 1099-R). 

 

@dmertz  - Thank you! I contributed $5500 for 2018 in early 2019 but did claim it on my taxes so Turbo Tax knew that I had 5500 basis at the end of 2018. I contributed another $6000 in 2019 and then converted to Roth resulting in $0 in the Traditional IRA at the end of the year. 

 

Only thing that's a little strange is I contributed $11500 to the Traditional (none was deductible) and converted $11501 to Roth so it's showing $1 taxable income but perhaps that's accurate (also not enough to worry about). 

 

Thank you! 

dmertz
Level 15

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

I'm glad you figured it out.  Yes, with a $1 investment gain while the money was in the traditional IRA, that $1 is taxable income that you should see included on Form 1040 line 4b.

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?


@ashleyblewis wrote:

 

 

Only thing that's a little strange is I contributed $11500 to the Traditional (none was deductible) and converted $11501 to Roth so it's showing $1 taxable income but perhaps that's accurate (also not enough to worry about). 

 

Thank you! 


Why is it strange if you converted $1 more than contributed?  Probably a wee bit of earnings that are indeed taxable.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Arsenyc
New Member

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

I'm having the same issue. I fill in all the right boxes, check all the conversion questions, yet my 8606 still comes out wrong. line 4 is blank, no matter what I do. This is definitely a bug in the system!

How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

The above steps fixed the issue for me. I hadn't yet added the contribution, only the distribution/conversion. Hope that helps you as well! 

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