topic The page of "Extra Tax on Early Retirement Withdrawals" , Turbotax says "No Early Retirement Withdrawals", despite that form 1099-R has "J" in box 7. How can I override? in Retirement tax questions

The page of "Extra Tax on Early Retirement Withdrawals" , Turbotax says "No Early Retirement Withdrawals", despite that form 1099-R has "J" in box 7. How can I override?

borderite — Sat, 01 Jun 2019 20:48:54 GMT

I took an early Roth IRA withdrawal but did not pay the 10% penalty. I understand that I need to include form-5329 to claim the penalty exceptions for some part of it and calculate the penalty for the rest. Turbotax, however, seems to misunderstand that my withdrawal was not early, despite that box 7 of the form-1099R shows 'J'. Please let me know how to get to form-5329 in my situation.

Did you take out any earnings more than your own prior c...

macuser_22 — Sat, 01 Jun 2019 20:48:54 GMT

Did you take out any earnings more than your own prior contributions ?

The amount I took out was below the total of my past cont...

borderite — Sat, 01 Jun 2019 20:48:55 GMT

The amount I took out was below the total of my past contributions.

You can always withdraw your own Roth contributions tax a...

macuser_22 — Sat, 01 Jun 2019 20:48:58 GMT

You can always withdraw your own Roth contributions tax and penalty free.

Enter a 1099-R here:

Federal Taxes,
Wages & Income
I’ll choose what I work on (if that screen comes up),
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

One of the followup questions will ask for your prior year** contributions not previously withdrawn. Those contributions that still remain in the Roth will not be taxed or subject to a early withdrawal penalty. That will add a 8606 form to your tax return with the Roth contribution and tax calculation in part III.

Note: **Prior year - any 2018 Roth contributions should be entered into the IRA contributions section. They will not show up in the prior years contributions but will be accounted for on the 8606 form that calculates the taxable amount.

@macuser_22 , Thanks for your clear and detailed explanat...

borderite — Sat, 01 Jun 2019 20:48:59 GMT

@macuser_22 , Thanks for your clear and detailed explanation. I apparently misunderstood the rules on the Roth IRA withdrawals. I wish that Turbotax would give a bit more detailed message, though.

See Ordering Rules for Roth distributions in IRS Pub 590B...

macuser_22 — Sat, 01 Jun 2019 20:49:00 GMT

See Ordering Rules for Roth distributions in IRS Pub 590B
<a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p590b#en_US_2018_publink1000231071">https://www.irs.gov/publications/p590b#en_US_2018_publink1000231071</a>

Thanks!!

borderite — Sat, 01 Jun 2019 20:49:01 GMT

Thanks!!