IRA Conversion to Roth

[IreneAli]

I am of retirement age. In 2023, I moved money from IRA to Roth. I understand I need to pay taxes but don't know how to answer the Turbo question - What Did You Do With The Money from IRA? There are 2 options

1) l moved the money to another retirement account (or returned it to the same retirement account).

2) l did something else with it (cashed out, etc.).

Which answer is correct? I was issued a 1099-R for this transaction.

[VolvoGirl]

Pick #1 moved it to another retirement account.  Then it will ask if it was to a ROTH.  

Then choose - I did a combination of rolling over, converting or cashing out the money
Then it will ask how much you converted to a ROTH

[MinhT1]

You should answer that you moved money to another retirement account, then in a subsequent question say that you moved it to a Roth IRA account.

The amount will be taxed.

[IreneAli]

When I transferred from IRA to ROTH, 20% was withheld for taxes, so only 80% went to the ROTH. What does Turbo do with this information? I still get taxed on 100%?

[IreneAli]

When I transferred from IRA to ROTH, 20% was withheld for taxes, so only 80% went to the ROTH. What does Turbo do with this information? I still get taxed on 100%?

[VolvoGirl · Accepted solution]

The whole gross amount (before taxes) is 100% taxable. Then you get credit for the taxes withheld on 1040 line 25b.  By the way, you could have added the withholding back in from other money to put 100% into the ROTH so it would continue to grow tax free.  But that wouldn't change the 100% taxable now.  

[TMichel]

I did these steps as two people have suggested:  

"moved to another retirement account" then " combo of rolling over, converting,..." then I entered the $10,000 in the "Amount converted to a Roth IRA". 

TurboTax then puts this $10000 as non-taxable.  I know this is not correct!  I am supposed to pay taxes on this distribution from a Trad IRA to a Roth IRA.  Does anyone have an idea what I may be doing wrong? 

[VolvoGirl]

Delete the 1099R and try entering it again Manually.  That usually clears something out.

[TMichel]

thank you, I will def try that!  I did try zeroing it out, but I will remove the whole thing and reenter manually.