How to enter Traditional to Roth conversion Rollover contribution in the turbotax online version ?

[Jeratwo]

O.K. I checked and they did do a ROTH conversion, so that's good. You are very helpful.   One more question others may be wondering. 

1. In January 2021, I deposited $6000 into ROTH IRA. 
2. Then, in January 2022, I did Recharacterization of $6000 from ROTH to Traditional IRA "for" 2021 tax year.
3. Then I found out that income limits disallowed any portion of this money to be "Before Tax" IRA deposit.
4. So then in April 2022 (for 2022 tax year) I did ROTH Conversion from the IRA back to ROTH for full $6000.

So question is..., since the original IRA deposit was NOT allowed as Before Tax (due to exceeding income limitations), and the $6000 deposit, was the FIRST and ONLY deposit made to this, or any other Traditional IRA I own, then as I understand it both of the following are True:

1. Because the IRA was disallowed as after tax income, and even though it was deposited in previous tax year (2021) than Roth Conversion (2022), I will not owe any taxes on the ROTH Conversion, since 100% of the money in all combined IRAs was the $6000, and 100% of that $6000 was not tax deferred (aka Before Tax) income. 
2. Even though I did a ROTH conversion for this tax year (2022), I can still deposit an additional $6000 into same ROTH for 2022 (so long as stay below income limitations).

Do these all sound correct?

Your help is so very appreciated!

[dmertz]

1.  Correct.  The basis in nondeductible traditional IRA contributions that appears on line 14 of your 2021 Form 8606 will carry forward to line 2 of your 2022 Form 8606 to reduce or eliminate the taxable amount of the Roth conversion.

2.  Correct.  As long as you have supporting compensation in 2022 and your modified AGI for the purpose does not exceed the limit, you can contribute to a Roth IRA.  The taxable amount Roth conversion, if any, is not included in your modified AGI.  The Roth conversion has no effect on the $6,000 regular contribution limit for 2022.

[Jeratwo]

Your knowledge and replies are remarkably good.  Thank you for being one of the few. Much appreciated.

[alexnwba]

In Tubotax 2022 premier under Wages and Income there is no button or tab for show me more.

[alexnwba]

The is no show more under Wages & Incomes.

[DoninGA]

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@alexnwba wrote:

In Tubotax 2022 premier under Wages and Income there is no button or tab for show me more.

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TurboTax 2022 Premier desktop CD/Download editions and TurboTax 2022 online editions -

[alexnwba]

There is no Show More in the Wage and Income tab.  All that shows is Start and Update to the right of all sub-tabs.

[DoninGA]

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@alexnwba wrote:

There is no Show More in the Wage and Income tab.  All that shows is Start and Update to the right of all sub-tabs.

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Which TurboTax program are you using?  The TurboTax online web-based editions or the TurboTax desktop CD/Download editions installed on a personal computer?

[DoninGA]

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@alexnwba wrote:

There is no Show More in the Wage and Income tab.  All that shows is Start and Update to the right of all sub-tabs.

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If you are seeing Start and Update then you are using the desktop editions -

To enter a IRA contribution -

• Click on Federal Taxes (Personal using Home and Business)
• Click on Deductions and Credits
• Click on I'll choose what I work on (if shown)
• Scroll down to Retirement and Investments
• On Traditional and Roth IRA Contributions, click the start or update button

Or enter ira contributions in the Search box located in the upper right of the program screen. Click on Jump to ira contributions

To enter, edit or delete a form 1099-R -

• Click on Federal Taxes (Personal using Home and Business)
• Click on Wages and Income (Personal Income using Home and Business)
• Click on I'll choose what I work on (if shown)
• Scroll down to Retirement Plans and Social Security
• On IRA, 401(k), Pension Plan Withdrawals (1099-R), click the start or update button

Or enter 1099-r in the Search box located in the upper right of the program screen. Click on Jump to 1099-R

[mnumbers]

Using TurboTax Deluxe and agree the problem is with the program. After you respond " I moved the money to another retirement account" there is no option to say "I converted the money to a ROTH acount"

[dmertz]

This is an old thread.  TurboTax used to have a selection specifically for a Roth conversion, but now you must select the option for doing a combination of rolling over, converting and cashing out, then indicate the amount converted (even if the entire amount was converted).

[mnumbers]

Thanks.  That works!

[ryanstan]

Good evening,

In 2022 I completed a total distribution of a 457b to a Traditional IRA. I then converted $25,000 of the new Traditional IRA to a Roth IRA.

I'm using the online Deluxe Turbo Tax. I entered my 1099-R for the distribution from the 457b to the Traditional IRA. However, at that point I am not prompted to answer whether I converted the entire distribution to a Roth IRA or only a partial conversion to a Roth IRA.

I then upgraded to the Premier online version of Turbo Tax hoping that it would allow me to answer this question, but it was not an option there either.

Can anyone please help? How can I enter a partial conversion to Roth? Does the downloadable version of Turbo Tax allow you to enter a partial conversion to a Roth?

Best,

R

[dmertz · Accepted solution]

@ryanstan , you have two separate transactions to report with a Form 1099-R for each.  The Form 1099-R from the 457(b), probably with code G, reports the rollover from the 457(b) to the traditional IRA.  Indicate that you did not roll it over to any kind of Roth account.

I assume that the Roth conversion from the traditional IRA to a Roth IRA occurred in 2022, so this is required to have been reported on a From 1099-R issued by the IRA custodian, probably with code 2 or code 7, and it will have the IRA/SEP/SIMPLE box marked.  (If the conversion was done in 2023, it's reportable instead on your 2023 tax return when you receive the 2023 Form 1099-R next year.)  When entering the Form 1099-R, you'll indicate the amount converted.

All versions of TurboTax support reporting these two transactions.

[ryanstan]

@dmertz Thank you so much for your help and clarification! I haven't received a separate 1099-R from the new IRA custodian and will track one down this week.