TurboTax is asking for your net Roth IRA contributions for all years prior to 2018, generally the sum of your Roth IRA contributions from inception (not including contributions for 2018) minus the amount of any Roth IRA distributions prior to 2018.
How do you find out what your total Roth IRA contributions were?
That information would be in your Roth IRA account statements and Forms 5498 that you have received over the years.
For example: If one started the Roth in 2014 and contributed a combined 20k by 2018, then took out distributions of 2k in 2015 and 5k in 2017 the total amount of contributions to report would be 13k?
What if I don't have that information? I checked with my broker and they only go back 6 years for the form 5498. I have had my Roth IRA since 1998.
This information is needed only if you make a nonqualified distribution from a Roth IRA which means that you need to supply this information on Form 8606 Part III. If you do not make any distributions from your Roth IRA before you reach age 59½ there will be no need to know your contribution basis since any distributions from your Roth IRA are qualified distributions, automatically tax and penalty free.
If you make distributions before age 59½ but they are less than what you know to be the amount of your contributions, you again have little problem because distributions are not taxable or subject to early-distribution penalty until your distributions exceed what you've contributed. You could potentially just enter the amount you know, but that kind of locks you in to that, minus the amount of any distributions, being your contribution basis to be applied to any future distributions from your Roth IRAs before age 59½.
If you made a previous distribution from your Roth IRAs you would have had to have provided your contribution basis on Form 8606 for that year, so you might have an old tax return that shows the amount of contributions up to that point.
If you know you have made the maximum possible Roth IRA contribution each year since 1998, the year Roth IRAs came into existence, you might be able to reconstruct your contribution history from knowing that. You could also just estimate your contributions and let the IRS challenge the reporting on Form 8606 Part III if they choose to do so, but that would be a last resort since it might mean that you would be filing an incorrect tax return that results in an underreporting of taxable income.
Thanks for the quick answer.
I am 61 and 2019 is the first time I took a distribution from my Roth IRA. So what I am getting from what you said it does not matter what number I put in there. Or do I? I could put zero.
@Jdub1 wrote:
Thanks for the quick answer.
I am 61 and 2019 is the first time I took a distribution from my Roth IRA. So what I am getting from what you said it does not matter what number I put in there. Or do I? I could put zero.
If you are over age 59 1/2 the you can just leave it blank - the distribution is penalty free reguardless of any contributions.
To me it sounds like TT is trying to verify if I am I 59
1/2
years old? That question is a lot easier for me (70 years) than what are my total contributions over the past 21 years?Turbo Tax wants you to enter all of your previous Roth IRA contributions, from inception.
The reason Turbo Tax is asking for this information is so that the program can determine what portion (if any) of any current or future withdrawals might be taxable or subject to early withdrawal penalties.
For more detailed information about Roth IRA Accounts, here is a great Turbo Tax article which outlines the details of how and when future distributions might be taxable or subject to early withdrawal penalties:
Roth IRAs-Holding Periods and Withdrawals
Sorry but there's a problem with this answer: Turbo tax knows my age (it's above 60) and yet it's asking me for the net contribution number. Since all withdrawals (your added money plus any interest or dividends) earned in a ROTH and withdrawn after 59 1/2 years of age are non-taxable, Turbo Tax should not be asking me to provide net contribution figures since at my age none of it's taxable.......
But Turbo Tax KNOWS my age and since I'm over 59 1/2 (at which point all withdrawals are tax free) why it it then asking me for this net contribution information?
Turbo Tax is also asking me for this information and I an over 59 1/2. If it knows my age and it also knows that any withdrawals made after 59 1/2 are tax free, why is it asking me to provide net contribution information????
The fact that you are over age 59½ is not a reason for TurboTax to skip asking for you Roth IRA contribution and conversion basis.
If it has not yet been 5 years since the beginning of the year for which you first made a Roth IRA contribution, distributions would not be qualified distributions and are required to be reported on Form 8606, which requires entering your Roth IRA contribution and conversion basis.
Also, the miscellaneous deduction for unrecoverable basis will be reinstated in 2026, so your basis information might be needed after 2026 if your Roth IRAs have suffered investment losses. Tracking your Roth IRA contribution and conversion basis now is much easier that trying to reconstruct it later, if need be.
But I have been using TT for over a decade and during that entire time each year I have reported ROTH contributions so TT KNOWS it's been more than 5 years since I first began contributing so again, based on that, all withdrawals are non-taxable. So again, why is it asking me this? Al;so, why not just ask me if I have been contributing for at least the last 5 years instead?
The answer to the question is required by the IRS. The IRA Information Worksheet that tracks contributions is provided as a convenience and not required. Many taxpayers do not enter it at all or do not use TurboTax every year. To be consistent for all taxpayers and to ensure that the 5 year rule is met, TurboTax requires an explicit answer and not rely on carry-over worksheets that may or may not be accurate or even exist.
See the third paragraph in my previous reply. The ability to claim (after 2025) a miscellaneous deduction for unrecoverable Roth IRA basis requires that TurboTax know you basis. Because this deduction will be reinstated, it makes sense that the question has not been eliminated from TurboTax for those who have met the requirements for qualified Roth IRA distributions.
So where is one to find total contribution information? it doesn't show it on my statement and I can't find it online.
Your IRA contributions must be tracked by you. They are reported to you by the financial institution on a 5498 form each year that you make a contribution, but you must track the totals. Because the IRA basis applies to ALL IRA accounts of the same type of IRA, the financial institution cannot know about other accounts that you might have so they cannot track it for you.
If you use TurboTax every year and always transfer last years data then the totals that TurboTax has would be on the IRA information Worksheet.
I know this an old thread but my question refers to the same currently. I opened a Roth 20 years ago contributing $4K and never contributed again. Obviously it grew over the years and I took out $5K in 2017 and closed it in 2021 taking out $4,600. What do I enter as prior contributions?
Your prior contributions would be the $4,000 contribution you made 20 years ago.