topic Re: Typo in 1099R conversion question? in Retirement tax questions

Typo in 1099R conversion question?

pirateforhire — Mon, 01 Mar 2021 20:52:41 GMT

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!

Re: Typo in 1099R conversion question?

DanaB27 — Tue, 02 Mar 2021 17:12:25 GMT

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".