If I have lost track of the basis for my Roth IRA. I have filed contributions and distributions. How do I correct or update this information in TurboTax or IRS?

[RXTerry]

I have never made excess contributions to my Roth, or recharacterized any contributions. I have made some after tax contributions to a 401K that was converted to a traditional IRA many years ago.  TurboTax keeps accurate track of this and adjusts the taxable amount of my traditional IRA distributions.

Am I in trouble with the IRS?

[dmertz · Accepted solution]

To know your basis in Roth IRA contributions and conversions, you'll need to reconstruct the contribution, conversion and distribution history of your Roth IRAs.  All of the necessary information should be captured in Forms 5498 and 1099-R issued to you and the IRS for these transactions in your Roth IRAs, but you can corroborate that with information from account statements and tax returns.  Forms 5498 and 1099-R are captured in your Wage & Income transcripts available from the IRS.

[shani20902tt]

I have collected my 5498's and 1099R's to construct the basis for my Roth IRA. How do I enter the correct historical information regarding my Roth contributions into Turbo Tax such that when I make my first Roth IRA withdrawal, Turbo Tax will calculate the basis correctly? As it stands right now, I can see from the worksheet that my Roth Contributions are much lower than they actually are, probably because I began contributing to a Roth many years before I began using Turbo Tax. The Roth conversions are correct because I began doing that after I started using TurboTax. How do I correct these early, historical Roth contributions on TurboTax?

[dmertz]

In the IRA contributions section, tell TurboTax that you want TurboTax to track your basis and simply correct the numbers that TurboTax presents.

[shani20902tt]

I am over 59 1/2 years of age. Do I have to worry about dates of contributions and conversions anymore for withdrawal purposes anymore? Does TurboTax need to have all this information when I make a withdrawal from my Roth next year in 2024? I ask because I've been making regular conversions for three years. I recognize that the principal amount I converted is always withdrawable after age 59 1/2, but do I still have to wait 5 years to withdraw the interest/dividends earned on that contribution or can I withdraw it all next year? In general, is TT going to need to calculate the basis at all after one turns 59 1/2?

[dmertz]

@shani20902tt , because you are over age 59½, you don't need to know your basis unless you make a distribution before 5 years from the beginning of the year for which you first made a Roth IRA contribution.  If your first Roth IRA contribution was a conversion contribution in 2021, you would need to know your basis to complete Form 8606 Part III for any Roth IRA distributions before 2026.  Until then your Roth IRAs would not be qualified and any earnings taken out, which come out last, would be taxable.