How to report early distribution as tax withholding from converting traditonal IRA to a Roth IRA?

[_Love_]

Hello,

I converted a traditional IRA to a Roth IRA.  In the process of the conversion, I opted for a tax withholding of $4500, which generated a 1099R in addition to another 1099R for the conversion.  That withholding is considered an early distribution.  How do I correctly enter this withholding in Turbo Tax Premier?  The software asked me 2 questions:

1.  What did you do with the money from the brokerage?  I checked "I did something else with it".  The $4500 was withheld to pay for the taxes due to the conversion.

2.  Did you use your IRA to pay for any of these expenses?  I checked "Another reason."

Did I answer the questions correctly?

Thank you.

[DavidD66]

Yes, you answered the questions correctly.  If you withdraw money from a traditional IRA before age 59½, you will have to pay income tax and a 10% penalty unless you qualify for an exception.  Paying the tax on a Roth conversion is not one of those exceptions.  For more information on the exceptions see the following IRS site:

Retirement Topics - Exceptions to Tax on Early Distributions