How to use TT to track Roth IRA cost basis

[duserman]

First time TT user here.

On last year's tax return that was done through a tax professional I see under the 'carryovers to 2022' general information section (both for federal and state) the following line: "Taxpayer Roth Conversion/Rollover Basis" and the relevant amount. 

Two questions:

1. If I understand correctly, this is just informational and not something that I need to enter somehow into this year's return, right?
2. Also, if I understand correctly, TT can help me track the Roth IRA basis using the 'IRA information worksheet' but I don't understand where and how to enter this data in that worksheet. Any guidance on this would be greatly appreciated.

[MaryK4]

Since a Roth IRA is not funded with pre-tax money (like a 401k) or is deductible (like a traditional IRA), there really is no "basis" - all of your contributions and earnings are tax-free if you make a qualified distributions (after you reach retirement age, etc.)  You may want to keep track of your contributions because if you take a distribution before you had the account open for five-years, you must pay the penalty for early withdrawal (but no tax on your contributions).  TurboTax will keep track of your Roth contributions, and calculate each year if you have an excess contribution (based on your other income).  

[dmertz]

While it's true that investments held in a retirement account have no capital cost basis, an individual Roth IRAs have basis in contributions and Roth conversions.  Basis in contributions and conversions is used on Form 8606 Part III when calculating the taxable amount of any nonqualified distribution from any of the individual's Roth  IRAs.

"You may want to keep track of your contributions because if you take a distribution before you had the account open for five-years, you must pay the penalty for early withdrawal (but no tax on your contributions)."

That's rather inaccurate.  Roth IRA distributions are subject to ordering rules that have contribution basis coming out first tax and penalty free no matter how long one has had a Roth IRA and any distribution made after age 59½ is not subject to penalty.

[duserman]

Thanks for your answer.

I definitely would like to keep track of my contributions in case of an early withdrawal. Looks like there's no guided step-by-step process for doing this and I have to somehow do it manually on the IRA worksheet. 

At this point my question is: how to actually input the contributions/conversions from prior years in TT? instructions on how to use that worksheet would be helpful.