topic Basic IRA to Roth Conversion - is 5329-T required and 6% tax in Retirement tax questions

Basic IRA to Roth Conversion - is 5329-T required and 6% tax

BobK59 — Fri, 02 Apr 2021 13:03:05 GMT

Hi,

I did a basic IRA to Roth conversion in 2020.

TurboTax is including the form 5329-T and imposing a 6% tax for excessive ROTH contributions.

I'm over 59-1/2 so there's no 10% penalty.

I was told that this 6% is not required.

Is this a TurboTax bug?

TIA

Re: Basic IRA to Roth Conversion - is 5329-T required and 6% tax

BobK59 — Fri, 02 Apr 2021 14:32:38 GMT

To add more detail here.

I took about $60k from an IRA. Say the IRA value was $200k total. So only a partial conversion.

TurboTax seems to want to add a 6% tax for excess Roth contributions. Form 5329-T

Did I somehow mess up a question when entering the 1099-R?

I see form 8606 discussed with possible issues.

Are there corrections on 8606 which will show this as a conversion and not a roth contribution?

TIA

Re: Basic IRA to Roth Conversion - is 5329-T required and 6% tax

dmertz — Fri, 02 Apr 2021 14:45:35 GMT

This is not a regular Roth IRA contribution. Nothing about this Roth conversion is to be entered anywhere under Deductions & Credits. Revisit and remove the erroneous entry that you presumably made there.

Re: Basic IRA to Roth Conversion - is 5329-T required and 6% tax

BobK59 — Fri, 02 Apr 2021 14:55:58 GMT

Thanks for the reply.

You nailed it.

I had entered it as a contribution too.

Removing that, fix it.

Have a great day!