How do you enter a traditional ira to roth conversion in TurboTax?

Just to be clear, this is not a backdoor Roth converison. It is taking money from an existing traditional IRA and converting it to a Roth IRA. 

Please follow these steps to enter the Form 1099-R for the conversion: 

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)" 
4. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
5. Enter the information from your 1099-R
6. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
7. Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount next to "Amount converted to a Roth IRA account"
8. Continue through the questions.

Which TurboTax Product/s can handle Traditional IRA moving to Roth IRA?

All versions, even the Online Free Edition.  And all the Desktop programs.

That has to be about the most NON-INTUITIVE way possible to enter a Roth conversion. Geez.

I followed the steps laid out on how to enter an IRA to Roth conversion under wages and income.  The person is over 70 years old and converted $7,800 from IRA to Roth which is below the $8,000 limit of what could be converted.  When I review the deductions section under Traditional and Roth IRA Contributions, the desktop software is saying he has an excess contribution to the Roth and there is a penalty but in his situation, he should simply pay the taxes on the money and the conversion should not result in a penalty or excess contribution.  

what do I need to do so the software realizes that it is not an excess contribution and is simply a conversion

When a distribution is taken from a Traditional IRA and then converted to a Roth IRA, nothing is entered in the Deductions and Credits section of the tax return with regard to contributing to the Roth IRA.  Money put into a Roth IRA through a conversion is not considered to be a contribution to the Roth IRA.

The distribution from the Traditional IRA is reported on Form 1099-R, which is entered in the Income section of the tax return.  After entering the Form 1099-R, the follow-up questions will indicate that the money was converted to a Roth IRA.  

There is no limit for the amount that can be converted from a Traditional IRA to a Roth IRA, unlike the limit for making an IRA contribution.  Just be sure to enter the basis in the Traditional IRA so that the correct taxable amount can be determined.  

Why do you have to specify a basis if it an IRA as ALL the funds in the IRA is taxable?  There is no basis and growth as far as I know as it is direct pretax deduction from paychecks.

When I go through the "I'll do it myself" by practicing on an old filled-in 2023 return in turbotax deluxe (NOT ONLINE) and try to enter the 1009-R from a IRA conversion using I'll do it myself, I don't see a quesion related to "what did you do with the money'.  It does seem that by selecting code H on the first code in line 7, (direct rollover of a designated ROTH) that this where I tell TT that the distribution is a ROTH conversion?

Is the question only for the online version?

The 1099-R form I received has code 7, in box 7.  Should it be H instead?  Code 7 is a "normal distribution'.  I added that as a second entry in line 7 in TT to 7.

Is this correct?

Thanks

I did some more ready and it seems I should enter G rather than H on line 7 for the 1099-R in TT.

However, when I look up the codes in TT help I see G to be "G – Direct rollover of a distribution to a qualified plan, a section 403(b) plan, a governmental section 457(b) plan, or an IRA"

It does not say roller to a ROTH.

Which code should I use?

@royper   I'll ask someone who knows more about your questions. @dmertz 

@royper , you mentioned that the contributions were made with pre-tax funds taken from your paycheck by your employer.  This implies that the distribution came from an employer plan like a 401(k), not from an IRA.  Since the Form 1099-R has code 7 (and should have the IRA/SEP/SIMPLE box unmarked), as long as you did not indicate to TurboTax that the entire distribution was RMD (RMDs are not eligible for rollover), TurboTax will ask what you did with the money.  You must indicate that you move the money to another retirement account, that you did a combination of rolling over, converting and cashing out, then indicate the amount that was deposited into the Roth IRA.

You must not change the code when entering the Form 1099-R.  Code H reports a rollover to a Roth IRA of funds from a designated Roth account in an employer plan, which is not what you did.  Code G is for a direct rollover, which is also apparently not what you did.  Code 7 indicates that you did an indirect rollover.

Having made no after-tax contributions to your employer plan, the rollover from the pre-tax account to the Roth IRA is entirely taxable.  The entire gross amount of the distribution will appear on Form 1040 line 5b with the ROLLOVER notation.

Code 7 also implies that there would have been a mandatory 20% withheld for taxes (unless the rollover was done in-kind rather than in cash).  Unless other funds were substituted for the portion withheld for taxes, less than the full distribution was rolled over to the Roth IRA.

I am retired.  I converted an IRA (using in kind conversion) to a ROTH.  None of the funds come to me and these are IRA not 401K, etc.   I expect to pay taxes on the entire amount.  How do I enter that in Turbo Tax Deluxe 2024?  Should I select code 7 and G in line 7 of the 1099-R form?  I had skippped that over this area in the first  interview and am now going back using the manual process to fix it.

Thank you.

Sorry, I forgot respond directly to your response.

This was from a IRA that I am converting to a ROTH as in-kind.  The Form 1099-R has code 7 and has the IRA/SEP/SIMPLE box marked.  It also shows in 2b that tax is undetermined.  As I indicated in another response I expect to pay tax on all of this conversion.  I skipped over this conversion in the initial interview and need to go back fax it.  I am using TT deluxe on windows.

I need to know if enter code 7 in the first box on line 7 of the TT 1099-R form and code G in the second or the other way.

THanks for any help.

Roy

Code G is never to be used for a Roth conversion from a traditional IRA.  Code 7 by itself is the correct code.  After entering the form details, indicate that you moved the money to another retirement account, that you did a combination of rolling over, converting and cashing out, then enter the amount converted to Roth.  TurboTax will include the taxable amount on Form 1040 line 4b.

Note that if you have basis in nondeductible traditional IRA contributions, the taxable amount is calculated on Form 8606 Parts I and II.

Thank you! I see that hitting G does not tax the amount I am rolling over. I removed that entry and just left it at 7 and it worked.

I saw an older explanation indicate using 2 in box 7.

I am here asking if it is recommened that a "place holder" 1099-R be issed for a person who took out from her IRS to put into a ROTH IRA.  She did not receive the fund.  The financial instituion mentioned they did not have to and will not be issuing a 1099-R since it was not report to the IRS.

How is this handled?

If you mean she transferred her traditional IRA balance to a Roth IRA, then it would need to be reported by entering a Form 1099-R in TurboTax. Since she will not have that, she will need to enter a substitute Form 1099-R as follows:

To enter a substitute form 1099-R in Turbo Tax Desktop follow these instructions:

1. Find the Retirement Plans and Social Security menu option in the Wages and Income section of TurboTax
2. Start or Update IRA, 401(k), Pension Plan Withdrawals (1099-R)
3. Choose Add (Another) 1099-R
4. Choose I'll type it in myself
5. On the screen that says Tell Us Which 1099-R You Have choose I need to prepare a Substitute 1099-R

To enter a substitute form 1099-R in Turbo Tax Online follow these instructions:

1. Find the Retirement Plans and Social Security menu option in the Wages and Income section of TurboTax
2. Start or Update IRA, 401(k), Pension Plan Withdrawals (1099-R)
3. Choose Add (Another) 1099-R
4. Choose I'll type it in myself
5. Choose the source of your 1099-R form
6. Enter your pension distribution into the Form 1099-R entry screens
7. When you come to the screen that says Do any of these situations apply to you? Check the box that says I need to file a substitute 1099-R and follow the instructions

@M1WV 

Thank you.

I read something similar but it was dated 2019 and I was warned against using information that was too old.

Thank you fot you answer(ing).

Thank you for your post.  TurboTax didn't ask question 6.  Any Thoughts?  

What is the code in box 7 of your Form 1099-R? Are you referring that you do not get the question to indicate it was conversion after entering your Form 1099-R?

Please see How do I enter a backdoor Roth IRA conversion? for additional information.

@mamadei 

Thanks for responding.  H in Box 7.  Think the 401k company screwed up my 1099R.  

@mamadei   Did you look on the back of your 1099R for the codes?  H is

H—Direct rollover of a designated Roth account distribution to a Roth

So it sounds like you moved from a ROTH to a ROTH account.

thx for the reply.  Majority was Roth to Roth.  Remaining was my company match to a Roth.  The company match should be taxable.  Code H is 100% Roth to Roth.