I have a 1099R for a IRA to Roth IRA conversion I did (backdoor roth method). This was not inherited, it was 100% my own funds (other than a little growth from the funds time as an IRA). I get to the final step of adding the 1099R where it says:
"Did you convert all of this $$$$$$$ (Box 1) to a Roth IRA? Because $0.00 was withheld in taxes, you should only select Yes if you actually converted $$$$$$$ using $0.00 of your own money.
- Yes, all of this money was converted to a Roth IRA
- No, I converted less than $$$$$$$
- I didn't convert any of the money"
This seems.... wrong. Saying "Yes" only if I converted it with ZERO of my own money does not seem right. Can someone confirm this is an error or explain why it works this way?
Thanks!
The question and answers are referring to cases where someone had taxes withheld on their Form 1099-R. If that is the case the person can only answer "yes, all of it was converted" if they added money from their own money/ other funds to cover the amount of income tax withheld to get back to the full distribution amount.
For example, someone has a $1,000 distribution and $100 income tax withheld then he had only $900 to put in the Roth. He would need to use $100 from other funds to make it $1,000 again. The sentence in TurboTax would say "Because $100.00 was withheld in taxes, you should only select Yes if you actually converted $1,000 using $100.00 of your own money". In this case the sentence might make more sense.
If you did not had taxes withheld and converted the full amount then you can select "Yes".
The question and answers are referring to cases where someone had taxes withheld on their Form 1099-R. If that is the case the person can only answer "yes, all of it was converted" if they added money from their own money/ other funds to cover the amount of income tax withheld to get back to the full distribution amount.
For example, someone has a $1,000 distribution and $100 income tax withheld then he had only $900 to put in the Roth. He would need to use $100 from other funds to make it $1,000 again. The sentence in TurboTax would say "Because $100.00 was withheld in taxes, you should only select Yes if you actually converted $1,000 using $100.00 of your own money". In this case the sentence might make more sense.
If you did not had taxes withheld and converted the full amount then you can select "Yes".