topic I converted my traditional IRA to a Roth IRA. All funds were contributed in prior years, but TT is penalizing me for contributing excess funds. How do I avoid this? in Retirement tax questions

I converted my traditional IRA to a Roth IRA. All funds were contributed in prior years, but TT is penalizing me for contributing excess funds. How do I avoid this?

kaufam7 — Wed, 25 Dec 2019 16:01:41 GMT

Re: I converted my traditional IRA to a Roth IRA. All funds were contributed in prior years, but TT is penalizing me for contributing excess funds. How do I avoid this?

VolvoGirl — Wed, 25 Dec 2019 16:19:22 GMT

Sounds like you are entering it under Deductions & Credits. Do not enter it there. That is only for new contributions you made in 2019. Only enter the 1099R you will get for it.

Enter a 1099R under

Federal Taxes on the left side

Wages & Income at the top

Then scroll way down to Retirement Plans and Social Security,

Then IRA, 401(k), Pension Plans (1099R) - click Start or Revisit

If you are filing a Joint return be sure to pick which person it is for.

Re: I converted my traditional IRA to a Roth IRA. All funds were contributed in prior years, but TT is penalizing me for contributing excess funds. How do I avoid this?

macuser_22 — Wed, 25 Dec 2019 16:40:48 GMT

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.

If this was a rollover or conversion, answer the question that you moved the money to another retirement account (can be the same account). The screen will open up with choices of where it was moved.

If it was a conversion then answer that you converted it all or part as needed.

[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.]

It will show as income on the summary screen which shows gross income, not taxable income.

The income will be reported on line 4a on the 1040 form with the word “ROLLOVER” next to it if it was a rollover.

The taxable amount will go on line 4b. In the case of a rollover, that amount will be zero.