topic Re: 1099-R in Retirement tax questions

1099-R

jr9836 — Fri, 09 Apr 2021 20:54:05 GMT

Annually wife and I fund non-traditional IRAs (funded with after tax dollars) and convert them to Roth IRAs same year. Received 1099-Rs for the rollover showing full amount as taxable, although on the earnings for the year should be since the IRAs were funded with after tax dollars.

How do I show this on return noting only the earnings as taxable?

Re: 1099-R

ThomasM125 — Fri, 09 Apr 2021 21:25:23 GMT

If the form 1099-R that you have is coded "N" in box 7 for recharacterized IRA, then the distribution will not show as taxable, so you can enter it as it is stated. Otherwise, if you enter it and the distribution is showing as taxable, you will need to get it corrected by the issuer.

You can prepare a substitute form 1099-R to report the earnings on the distribution. Enter the earnings in box 1 and box 2 and use code "8" in box 7. You will see an option to prepare a substitute form 1099-R in TurboTax as follows:

Re: 1099-R

jr9836 — Fri, 09 Apr 2021 21:28:51 GMT

Box 7 is marked as '2' Early Distribution even though it was rolled to Roth.

Re: 1099-R

jr9836 — Fri, 09 Apr 2021 21:38:02 GMT

Box 7 is marked as '2' Early Distribution even though it was rolled to Roth.

Re: 1099-R

ThomasM125 — Fri, 09 Apr 2021 21:43:41 GMT

You should enter the form 1099-R the way it is stated, but indicate that it was rolled over to another traditional IRA, that way the distribution won't show as taxable. Then, do the substitute 1099-R entry to report the taxable earnings.

Re: 1099-R

jr9836 — Fri, 09 Apr 2021 21:47:14 GMT

Thank you Thomas! Where do I indicate that it was a rolled over?

Re: 1099-R

DawnC — Fri, 09 Apr 2021 22:10:53 GMT

You will get the rollover questions after you enter Form 1099-R. There will be follow-up questions after you enter the form. The screen will ask what you did with the money, see below.