How does turbotax deluxe handle roth ira distributions used for college expenses

mccarthych — Sat, 01 Jun 2019 15:15:23 GMT

I used a Roth IRA funds to pay for my daughters college and the money was in the account for over 5 years

You will need to indicate in the program that that is wha...

Coleen3 — Sat, 01 Jun 2019 15:15:53 GMT

You will need to indicate in the program that that is what the distribution is for. See the screen shot below.

You can always withdraw contributions (but not earnings) that you made to your Roth IRA tax and penalty free at anytime. Additionally, the Ordering rules for withdrawals from a Roth IRA are: first from regular contributions, then from Conversion and rollover contributions, on a first-in, first-out basis and finally from Earnings on contributions.

Please note: A qualified distribution from a Roth IRA is tax-free and penalty-free, provided that the five-year aging requirement has been satisfied and one of the following conditions is met:

Over age 59½

Death or disability

Qualified first-time home purchase

A non-qualified distribution is subject to taxation of earnings and a 10% additional tax unless an exception applies. For Roth IRAs, you can always remove post-tax penalty contributions (also known as "basis") from your Roth IRA without penalty.

When you are entering this information into TurboTax, your Form 1099-R, box 7 codes J, Q and T identifies a Roth IRA distribution and determines the tax treatment. If you have a J or a T, the distribution is considered taxable unless there is an exception. TurboTax will guide you on all the exceptions.

Please refer to this IRS link for more information about Roth IRAs:

https://www.irs.gov/publications/p590b/ch02.html#en_US_2015_publink1000231071

topic How does turbotax deluxe handle roth ira distributions used for college expenses in Retirement tax questions

How does turbotax deluxe handle roth ira distributions used for college expenses

You will need to indicate in the program that that is wha...