Solved: I have a 1099r traditional ira that I rolled over to a Roth Ira which I have form 5498.
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sckorner
New Member

I have a 1099r traditional ira that I rolled over to a Roth Ira which I have form 5498.

I was told as long as I dont touch it until Im 59 i wont have to pay taxes on it, its says Ido It says I owe 53,000. sandy [removed]
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dmertz
Level 15

I have a 1099r traditional ira that I rolled over to a Roth Ira which I have form 5498.

The conversion from the traditional IRA to the Roth IRA is a taxable event.  The entire amount is taxable as ordinary income unless you have some amount of nondeductible contributions in your traditional IRAs.  In addition to any nondeductible contributions you made directly to the traditional IRA, you could have nondeductible contributions that resulted from a rollover of after-tax money from the 401(k), although this is not common.  An after-tax amount rolled over from the 401(k) would generally have been reported in box 5 of the Form 1099-R that reports the rollover from the 401(k) to the traditional IRA.

If the tax result of the Roth conversion is not to your liking, you can undo some or all of the conversion by asking your Roth IRA custodian to do a recharacterization back to a traditional IRA of some or all of the amount converted.  You have until the due date of your tax return to do a recharacterization.

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6 Replies
Lisa995
Level 12

I have a 1099r traditional ira that I rolled over to a Roth Ira which I have form 5498.

Was the money that went into the Traditional IRA from tax deferred contributions made through payroll?  If so, rolling a Traditional IRA into a ROTH IRA is generally a taxable event.  Once the money is in the ROTH for 5 years, you can take it out tax free, but converting from the traditional IRA you pay tax at the time you convert it to the ROTH.
♪♫•*¨*•.¸¸♥Lisa♥ ¸¸.•*¨*•♫♪
sckorner
New Member

I have a 1099r traditional ira that I rolled over to a Roth Ira which I have form 5498.

It was a 401k initially and then I converted that to an IRA and then converted it to the Roth IRA end of last year.
Lisa995
Level 12

I have a 1099r traditional ira that I rolled over to a Roth Ira which I have form 5498.

That sounds like a taxable event to me.  

@dmertz  I know you can explain how this works better than I can.  (dmertz is our resident retirement guru)
♪♫•*¨*•.¸¸♥Lisa♥ ¸¸.•*¨*•♫♪
Lisa995
Level 12

I have a 1099r traditional ira that I rolled over to a Roth Ira which I have form 5498.

@dmertz   try the tag again
♪♫•*¨*•.¸¸♥Lisa♥ ¸¸.•*¨*•♫♪
sckorner
New Member

I have a 1099r traditional ira that I rolled over to a Roth Ira which I have form 5498.

Ok that's what I have 1099r and 5498, and so do you have to pay taxes?
dmertz
Level 15

I have a 1099r traditional ira that I rolled over to a Roth Ira which I have form 5498.

The conversion from the traditional IRA to the Roth IRA is a taxable event.  The entire amount is taxable as ordinary income unless you have some amount of nondeductible contributions in your traditional IRAs.  In addition to any nondeductible contributions you made directly to the traditional IRA, you could have nondeductible contributions that resulted from a rollover of after-tax money from the 401(k), although this is not common.  An after-tax amount rolled over from the 401(k) would generally have been reported in box 5 of the Form 1099-R that reports the rollover from the 401(k) to the traditional IRA.

If the tax result of the Roth conversion is not to your liking, you can undo some or all of the conversion by asking your Roth IRA custodian to do a recharacterization back to a traditional IRA of some or all of the amount converted.  You have until the due date of your tax return to do a recharacterization.

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