topic Re: Does TT allow for second 8606 to distinguish between Roth and Traditional SEPPs? in Retirement tax questions

Does TT allow for second 8606 to distinguish between Roth and Traditional SEPPs?

b-buczkiewicz — Wed, 08 Jul 2020 17:31:12 GMT

With one 8606 my distributions from both TIRA and RIRA are being lumped together and treated with no penalty as they are less than my RIRA basis. I should however pay penalty on a portion of my early withdraw from my TIRA. I don't know how to account for the difference.

Re: Does TT allow for second 8606 to distinguish between Roth and Traditional SEPPs?

dmertz — Wed, 08 Jul 2020 21:00:52 GMT

There is only one Form 8606 per individual. Traditional IRA distributions appear on Part I or Part II while Roth IRA distributions appear on Part III, but only if they are not qualified Roth IRA distributions. Qualified Roth IRA distributions don't appear anywhere on Form 8606. TurboTax properly reports each on the separate parts and properly keeps traditional IRA basis separate from Roth IRA basis.

Make sure that when TurboTax asked for your contribution basis in traditional IRAs for years prior to 2019 that you did not include your Roth IRA basis. TurboTax separately tracks traditional IRA basis and Roth IRA contribution and conversion basis.

Re: Does TT allow for second 8606 to distinguish between Roth and Traditional SEPPs?

Kate12NJ — Fri, 10 Jul 2020 04:49:51 GMT

Does that meant that my Roth conversion withdrawal from my non-deductible IRA and the RMD from my inherited (grandparent) IRA will be calculated together? NJ taxes them separate so I don’t know if the NJ calculation will be jumbled with the 2 amounts? Please help

Re: Does TT allow for second 8606 to distinguish between Roth and Traditional SEPPs?

dmertz — Fri, 10 Jul 2020 13:15:16 GMT

No. The IRA that you inherited from your grandparent is always to be treated entirely separately from any IRAs of which you are the participant. I can't be of much more help in how this is handled on a NJ tax return. Whatever calculations are done should be done for the inherited IRA separately from your own IRAs.