topic What is turbotax looking for in requesting prior year ROTH contributions? in Retirement tax questions

What is turbotax looking for in requesting prior year ROTH contributions?

user97530 — Tue, 04 Jun 2019 19:21:20 GMT

I've only recently started withdrawing from my ROTH IRA (just normal post retirement withdrawals). I have no record of a contribution, I've had the Roth IRA for over 20 years, but don't know when I last contributed. It is at least more than six years, probably more. What is turbotax (and IRS) looking for? And how would I find this data. My brokerage doesn't have it.

The main reason that TurboTax asks for your contribution...

dmertz — Tue, 04 Jun 2019 19:21:22 GMT

The main reason that TurboTax asks for your contribution and conversion basis is, if your distribution is not a qualified distribution, the taxable amount needs to be determined on Form 8606 Part III using the ordering rules for Roth IRA distributions. Because you've had a Roth IRA for many years (presumably contributing to a Roth IRA shortly after Roth IRAs first became available in 1998), if you were over age 59½ at the time of the distributions your Roth IRA distributions are qualified distributions, automatically tax and penalty free, without any need for Form 8606 and no need to know your contribution and conversion basis to determine the taxable amount of the distributions.

For years prior to 2018 TurboTax, TurboTax also needed to know your basis to determine if you had any unrecoverable basis that could be claimed as a miscellaneous deduction subject to the 2% of AGI floor and you fully distributed all of your Roth IRAs. However, for 2018 through 2025, this deduction has been suspended. When this deduction again becomes available in 20206, TurboTax will again need the basis information to determine if you qualify for this deduction, so TurboTax needs to continue to track your basis.

Your Roth IRA contributions and conversions are recorded...

dmertz — Tue, 04 Jun 2019 19:21:23 GMT

Your Roth IRA contributions and conversions are recorded on the Forms 5498 that the IRA custodian sends to you for any year for which you made a contribution or conversion.