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foreosu
New Member

I contributed $2,600 to my ROTH IRA in 2017 then withdrew $1,000 for personal reasons later that year. Now I'm being taxed on that money. I thought it would be tax free?

 
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MinhT
Expert Alumni

I contributed $2,600 to my ROTH IRA in 2017 then withdrew $1,000 for personal reasons later that year. Now I'm being taxed on that money. I thought it would be tax free?

For a Roth IRA, you are not taxed or pay an early withdrawal penalty when you withdraw all or part of your contributions.

In TurboTax, make sure you enter your Roth IRA contributions so that your withdrawal is not taxed. Follow the interview after you have entered your form 1099-R until you get to the page titled Enter Prior Year Roth IRA Contributions and you can enter $2,600 (see attached screenshot).

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5 Replies
MinhT
Expert Alumni

I contributed $2,600 to my ROTH IRA in 2017 then withdrew $1,000 for personal reasons later that year. Now I'm being taxed on that money. I thought it would be tax free?

For a Roth IRA, you are not taxed or pay an early withdrawal penalty when you withdraw all or part of your contributions.

In TurboTax, make sure you enter your Roth IRA contributions so that your withdrawal is not taxed. Follow the interview after you have entered your form 1099-R until you get to the page titled Enter Prior Year Roth IRA Contributions and you can enter $2,600 (see attached screenshot).

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
foreosu
New Member

I contributed $2,600 to my ROTH IRA in 2017 then withdrew $1,000 for personal reasons later that year. Now I'm being taxed on that money. I thought it would be tax free?

Thanks.  However, our contributions were made in 2017, and we withdrew in 2017.  This would not be a "prior year" contribution.  Where do we ent 2017 contributions?
MinhT
Expert Alumni

I contributed $2,600 to my ROTH IRA in 2017 then withdrew $1,000 for personal reasons later that year. Now I'm being taxed on that money. I thought it would be tax free?

Please see @dmertz's comment below. Thank you @dmertz.
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dmertz
Level 15

I contributed $2,600 to my ROTH IRA in 2017 then withdrew $1,000 for personal reasons later that year. Now I'm being taxed on that money. I thought it would be tax free?

If you made a Roth IRA contribution for 2017, you must enter it under Deductions & Credits -> Retirement and Investments -> Traditional and Roth IRA Contributions, not as prior-year contributions.  However, if the Roth IRA contribution you made in 2017 was made between January 1 and April 18, 2017 for the 2016 tax year, then it needs to be entered as part of total of prior year contributions.
foreosu
New Member

I contributed $2,600 to my ROTH IRA in 2017 then withdrew $1,000 for personal reasons later that year. Now I'm being taxed on that money. I thought it would be tax free?

Thanks all
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