The indicated federal tax owed is insensitive to what fraction of a traditional IRA distribution I returned to a Roth IRA in a conversion. This seems like an error.
under 1099-R entries. When I say "I did something else" with the money. Eg. $380k IRA distribution, $180k of that was immediately converted to Roth. But the Fed Tax did not go down. Why?
02581
2 Replies
VolvoGirl
Level 15
Mar 1, 2021 2:44:46 PM
If you converted 180k to a ROTH IRA it is taxable. Going from a Traditional IRA to ROTH IRA is a taxable event. What did you do with the rest of it?
ShelleyD
Level 1
Mar 1, 2021 2:46:38 PM
With a Roth IRA you pay the tax and then when you withdraw, there is no tax due. The benefit is you can grow your money tax free.