Turbotax

Forum|Forum|3 years ago
February 5, 2023
2 replies
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Deleted

TurboTax Free Edition Online

fanfare

Level 15

" then entered my total of "IRA Contributions Previously Taxed" which is equal to the distribution on the 1099-R"

"IRA Contributions Previously Taxed" means shown and taxed on prior NJ tax returns, so your statement is incorrect.

Since this is your first distribution, the previously taxed amount is (usually) zero.

In future, you won't get that question again after the first NJ distribution, the worksheet doesn't call for it.

fanfare

Level 15

for a regular IRA you can't say only contributions were taken out. it is not allowed.

for a Roth IRA you can say that, up to the point you use up all the contributions.

I'm not sure how NJ treats that (Code J) since I never took money out of a Roth.

Evidently TurboTax thinks the rule is different.

All the questions you described apply to Traditional IRAs.

This is not your first distribution from a Traditional IRA.

For Roth distribution, you should bypass those entries, backing out what you entered.

For example the total value all Traditional IRAs is not relevant.

TurboTax should not be asking you for that Traditional IRA information.

@waespym

fanfare

Level 15

All the questions you described look like those that apply to Traditional IRAs.

my first answer above was with Traditional IRA in mind.

Since TurboTax knows it is a Roth, maybe it asks similar questions,

but the calculation would be (or should be) different for a Roth, as you point out.

(The total value of all Roth IRAs at year end does not appear to be relevant.)

Sorry for any additional confusion caused by me jumbling Roth IRA and Traditional IRAs together.

STN802

Level 2

I had the same issue. Turbo Tax is trying to say that I owe a large amount of money for withdrawing contributions from my Roth IRA. Anyone can easily look up that these contributions were already taxed and can be withdrawn early at any time without tax or penalty. In addition, several options throughout that process were pretty poorly worded by Turbo Tax.

I ended up stopping my taxes with Turbo Tax this year and giving my business to H&R block instead.