I am 70 years old , why is roth ira withdraw being put in taxable income
For Roth IRAs,
you can always remove post-tax penalty contributions (also known as
"basis") from your Roth IRA without penalty.
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 $20,000 to your Roth IRA in prior years, you
will put $20,000 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.
note: A qualified distribution from
a Roth IRA is tax-free and penalty-free, provided that the five-year aging
requirement has been satisfied and one of the following conditions is met:
first-time home purchase
If you meet the five-year aging, you can indicate that in the interview process. (See the attached screenshot below. Click to enlarge.)
A non-qualified distribution is subject to taxation of earnings and a 10%
additional tax unless an exception applies. For Roth IRAs, you can always remove
post-tax penalty contributions (also known as "basis") from your Roth
IRA without penalty.
When you are entering this
information into TurboTax, your Form 1099-R, box 7 codes J, Q and T identifies
a Roth IRA distribution and determines the tax treatment. If you have a J or a
Q, the distribution is considered taxable unless there is an exception.
TurboTax will guide you on all the exceptions.
Please refer to this IRS link for
more information about Roth IRAs: