Solved: I converted money from traditional ira to roth ira within 60 days of withdrawal---why is it charging a 10% penalty?
Discuss
Discover
  • Community Basics
  • Connect with Others
  • Top Contributors
  • News & Announcements
    • Support
  • Turbo™
  • TurboTax™
    • Sign Up

    Why sign in to the Community?

    • Submit a question
    • Check your notifications
    or and start working on your taxes
    Announcements
    TurboTax has you covered during Covid. Get the latest second stimulus info here.
    cancel
    Turn on suggestions
    Showing results for 
    Search instead for 
    Did you mean: 
    brycen-6033
    New Member
    posted
    ‎June 4, 2019 5:02 PM
    last updated ‎June 04, 2019 5:02 PM

    I converted money from traditional ira to roth ira within 60 days of withdrawal---why is it charging a 10% penalty?

    age 50

    0
    10
    286
    Reply
    1 Best answer

    Accepted Solutions
    dmertz
    Level 15
    ‎June 4, 2019 5:02 PM

    I converted money from traditional ira to roth ira within 60 days of withdrawal---why is it charging a 10% penalty?

    TurboTax presently has a bug where it is treating an indirect Roth conversion as subject to penalty.

    If no taxes were withheld from the code 1 distribution, you can work around the problem by selecting code 2 on TurboTax's 1099-R form instead of code 1.  Because there were no taxes withheld, the details of what you selected are not transmitted to the IRS.  (If taxes were withheld, I can provide alternative workarounds, but they will involve paper filing by mail.)

    I would not wait for a fix to be provided by TurboTax; TurboTax Product Quality has so far not acknowledged the existence of this serious bug.

    View solution in original post

    0
    9
    286
    Reply
    10 Replies
    dmertz
    Level 15
    ‎June 4, 2019 5:02 PM

    I converted money from traditional ira to roth ira within 60 days of withdrawal---why is it charging a 10% penalty?

    TurboTax presently has a bug where it is treating an indirect Roth conversion as subject to penalty.

    If no taxes were withheld from the code 1 distribution, you can work around the problem by selecting code 2 on TurboTax's 1099-R form instead of code 1.  Because there were no taxes withheld, the details of what you selected are not transmitted to the IRS.  (If taxes were withheld, I can provide alternative workarounds, but they will involve paper filing by mail.)

    I would not wait for a fix to be provided by TurboTax; TurboTax Product Quality has so far not acknowledged the existence of this serious bug.

    View solution in original post

    0
    9
    287
    Reply
    Carl
    Level 15
    Level 15
    ‎June 4, 2019 5:02 PM

    I converted money from traditional ira to roth ira within 60 days of withdrawal---why is it charging a 10% penalty?

    But if you would please, at the top of the program click the ONLINE option and select "send tax file to agent". After it removes all of your personal information the sanitized file is sent to TurboTax and you will be presented with a 6-digit token number. Post that token number here please so the agents can know what post your sanitized file is associated with. Hopefully you get a token.
    0
    286
    Reply
    SPIKEHAYES64
    Level 2
    ‎June 4, 2019 5:02 PM

    I converted money from traditional ira to roth ira within 60 days of withdrawal---why is it charging a 10% penalty?

    Having the same problem. moved $30k from IRA to Roth IRA. Sent file via online.
    0
    286
    Reply
    SPIKEHAYES64
    Level 2
    ‎June 4, 2019 5:02 PM

    I converted money from traditional ira to roth ira within 60 days of withdrawal---why is it charging a 10% penalty?

    I sent file to an agent. Who should I share token # with?
    0
    286
    Reply
    dmertz
    Level 15
    ‎June 4, 2019 5:03 PM

    I converted money from traditional ira to roth ira within 60 days of withdrawal---why is it charging a 10% penalty?

    taxdaughter2, just to be certain that you are experiencing the same bug, what is the code in box 1 of your Form 1099-R for the distribution from the traditional IRA?
    0
    286
    Reply
    SPIKEHAYES64
    Level 2
    ‎June 4, 2019 5:03 PM

    I converted money from traditional ira to roth ira within 60 days of withdrawal---why is it charging a 10% penalty?

    Code in box 7 is 1
    0
    286
    Reply
    dmertz
    Level 15
    ‎June 4, 2019 5:03 PM

    I converted money from traditional ira to roth ira within 60 days of withdrawal---why is it charging a 10% penalty?

    Since you are not in contact with a TurboTax support agent, I suggest posting the Token number here.

    I don't have much hope that we'll see this bug get fixed by the filing deadline.  If the Form 1099-R shows no tax withholding in box 4, I suggest using the workaround mentioned above.
    0
    286
    Reply
    Carl
    Level 15
    Level 15
    ‎June 4, 2019 5:03 PM

    I converted money from traditional ira to roth ira within 60 days of withdrawal---why is it charging a 10% penalty?

    @taxdaughter2 you need to post the token number here. Without that token number, the agents and programmers have no clue who to tie the sanitized file to that you sent them, and therefore have no idea "why" you sent it.
    0
    286
    Reply
    SPIKEHAYES64
    Level 2
    ‎June 4, 2019 5:03 PM

    I converted money from traditional ira to roth ira within 60 days of withdrawal---why is it charging a 10% penalty?

    token number is 495401
    0
    286
    Reply
    Carl
    Level 15
    Level 15
    ‎June 4, 2019 5:03 PM

    I converted money from traditional ira to roth ira within 60 days of withdrawal---why is it charging a 10% penalty?

    @TurboTaxGabi see above for token.
    0
    261
    Reply
    Dynamic Ads
    v
    Privacy Settings