Tax not calculated on a Roth IRA Conversion
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Returning Member

Tax not calculated on a Roth IRA Conversion

I converted a sum of money from my traditional IRA to my Roth IRA.

 

After I entered my 1099-R and answered all of TurboTax's subsequent questions, I'd expected my taxes to go up.  The money moved from pre-tax to taxable income.  But TurboTax is telling me that it isn't taxable due to my answer in box 7.

 

My 1099-R has box 7 marked as 2.  I'm wondering if I should add "B" for designated Roth distribution and if that might fix the problem.  But, I'm concerned about entering something which doesn't match my 1099-R.

 

Is there any other way to fix this problem?

5 Replies
Highlighted
Level 15

Tax not calculated on a Roth IRA Conversion

A Traditional IRA is NOT a designated Roth.  Code 2 is correct.

 

Box 2a should be the same as box 1 which is the taxable amount unless you had a non-deductible basis in the Traditional IRA.

 

Did you check the IRA/SEP/SIMPLE box?

Enter a 1099-R here:

Federal Taxes,
Wages & Income
I’ll choose what I work on (if that screen comes up),
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR  Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

If this was a rollover or conversion, answer the question that you moved the money to another retirement account (can be the same account). The screen will open up with choices of where it was moved.   Choose that it was converted to a Roth IRA.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

The taxable amount will go on line 4b of the 1040.

 

 

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Highlighted
Returning Member

Tax not calculated on a Roth IRA Conversion

Thank you for the help. 

 

You described exactly how I've filled out TurboTax.  That's what makes this so confusing.  The only item that I haven't done yet is to look at line 4b on the actual 1040 form, as I'm still entered other tax data.

 

Box 1 and 2a are the same.

 

I did check the IRA / SEP / SIMPLE box.

 

This was a conversion. I did answer the follow up questions after the 1099-R.  I entered that I moved it to another retirement account and that it was converted to a Roth IRA.

Highlighted
Level 15

Tax not calculated on a Roth IRA Conversion

Then the 1040 line 4b should be the same amount as the 1099-R box 2a.  If not, then I suggest deleting the 1099-R and re-enter it.

 

(If you are not looking at the 1040 line 4b to see the taxable amount then what are you looking at when you say that it is not being taxes?)

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Highlighted
Returning Member

Tax not calculated on a Roth IRA Conversion

When I say my conversion is not being taxed, it is based upon the screen after I enter the 1099-R, which tells me "Good News: You Don't Owe Extra Tax on This Money," based upon having marked 2 in box 7, and because my Federal Refund (in progress) number does not change.

 

I'm not how to get to my actual 1040 form until I finish the federal review.

 

I just deleted my 1099-R and re-entered it, and nothing has changed.

 

Someone posted a question like this last year and it wasn't ever resolved. I wonder if it is a bug in TurboTax, but if it is, then I'm not sure what to do. Perhaps I can edit the 1040 before it is sent to the IRS?

Highlighted
Level 15

Tax not calculated on a Roth IRA Conversion

It's saying you don't owe the extra 10% Early Withdrawal Penalty on it.  It may have changed your tax return before you noticed or the withholding in box 4 was enough to cover the tax due on it so your refund didn't change.

 

Before filing,  You can preview the 1040 or print the whole return

https://ttlc.intuit.com/community/accessing/help/how-do-i-preview-my-turbotax-online-return-before-f...

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