IRA BASIS

[warda26]

I had an employer 401k that was rolled over into one traditional IRA and a Roth IRA when I stopped working for them. I closed both accounts in 2024 without making any new contributions after the rollovers but I don’t know my total contributions. How can I determine my basis and will I have to pay taxes on the full withdrawal amount if I also didn’t report the automatic rollovers?

[DanaB27]

You won't have a basis in the traditional IRA because you rolled over pre-tax funds.  Distributions from the traditional IRA will be fully taxable unless you made nondeductible contributions in the past. If you did you then you should have Form 8606 when you made these nondeductible contributions. 

If your conversion basis didn't carry over then you can enter them after you entered all Form 1099-Rs in the follow-up questions. You also can enter the net contributions prior to 2024. If you do not know them you will have to check your past records to see if you can find the contributions for each year.

To clarify, are you over 59 1/2? Did you have the Roth IRA for 5 years? If yes, then you have a Qualified Distribution which isn't taxable and you do not have to worry about entering your net contributions prior to 2024 and conversions prior to 2024.

[warda26]

I am under 59yrs old. I have my contributions from my last W2s which say I had designated Roth contributions under a 401k plan and elective deferrals. Am I able to say some of it was used for me to go back to college? My distribution was August 2024, for me to start in January 2025. 

[DanaB27]

If this was a distribution from the 401k then no. 

If it was a distribution from the IRA then you can get the 10% early withdrawal exception for qualified higher-education expenses. You can indicate this in the follow-up questions when you click continue after all Form 1099-Rs are entered. Please note, you will only get this screen if you had a taxable IRA distribution.

Please see IRS Exceptions to tax on early distributions for additional information.